CC Definitions help explain all the various charges that are agreed to when you first sign up with a MSP.
Your monthly statements will have all these different charges that should only be on your statement, if you agreed to them!
Understanding your statements is critical. I've seen too many over the years that will have "double billing" on them. This usually occurs in the "per Item" type charges - perhaps another 10 cents per item charge that inadvertently appears on your statements. However, it is still your money being taken!
Some CC Definitions
Per Item is usually a charge for every transaction - approved or not. This is usually in a cents per transaction. Example - 10 cents per transaction. This fee will obviously be dependent upon your contract agreement.
The MSP will have this type of a Fee as well as the Visa/MasterCard Network.
If you are lucky enough to have a "Pass Thru Interchange Rate" Agreement, these charges can be easily picked out on your statements. You'll see a MSP Section and then a larger section detailing each type of credit card fee cost - with the Per Item shown there.
Authorization Fee is usually a charge per transaction as well. This is a fee to get the cardholders processing "instantly" approved.
Address Verification Fee is to the Merchant's advantage. This is very useful with a "Gateway" transaction. This helps to verify the cardholder is actually the one making the Internet transaction. That's why you'll see some machines asking for your zipcode or your full address - even phone numbers.
It can be inconvenient, but it also helps cut down on credit card FRAUD considerably! That helps reduce every Merchant's chargebacks!
Gateway is a term for the various companies that offer a secure Internet connection between a card holder and a Merchant. They only came into being with the advent of Internet Sales. Prior to that, you had the card in front of you when a person purchased a product or checked in, as an example.
Now, with the popularity of Internet Sales, a Gateway System is essential for a secure transaction. Even with all the great safeguards in place, fraud and scam artists are still hacking into systems.
As we explained earlier, understanding your credit card fee statement is quite the challenge! However, these terms may help you be sure all is "correct" on your statements. Remember, verify that your "Effective Rate" is the same each month.
By Bernie Martin
That's a great start to cutting your Processing Costs.
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