Many small businesses don’t realize that the type of credit card that a customer uses can have an impact on how much their business will have to pay in credit card processing fees. The reason for this is because the interchange rate that credit card companies such as Visa and MasterCard charge businesses for each transaction fluctuates depending on if the card is a “premium” card that offers extra credit card services to users such as airline miles or cashback, or is a corporate card.
Credit card companies raise the rates they charge businesses for each “premium” card transaction for a simple reason: it costs them more time and money to manage and process transactions on these cards. In recent years, Visa and MasterCard have decided to pass some of these costs to the end business user. Regardless of the payment gateway they use, a small business owner will have to pay a higher rate for processing a premium card.
With this type of variable rate structure being firmly in place, you can see why it’s easy for small businesses to get confused about the true rate they are going to pay for various credit card transactions that they accept. The best things that you can do as a small business owner to avoid being surprised by rates and fees is to study the interchange table of rates extensively ahead of time and to work with a credit card processor such as Charge.com Payment Solutions, Inc. that is upfront and honest with their credit card policies.