The Tier Method is one of the types of systems used by Merchant Services Companies to charge Business Owners for accepting credit cards.
If you have a Three (3) Tier method on your statement, you are not being given proper credit for a Debit Card charge. A typical Four (4) Tier method on your statement is more accurate to Industry standards and you are "probably" getting credit for Debit Cards.
Before we go any further, there are easily over 100 types of credit cards issued by the major companies - Visa and MasterCard.
The structure is:
Debit Cards are more unique. In the beginning, they required a special PIN PAD to be entered with the "swipe" to process the card. A Debit Card removes actual cash from your customer's account into the Merchant's Bank Account immediately upon settlement. The technology has advanced enough now that a PIN PAD isn't needed to still obtain a very low Fee.
If you have a Three (3) Tier system, all your Debit Cards are being charged to your First Tier Rate - usually a FULL POINT above the actual cost of a Four tier system.
Example - a Four Tier System could be charged to the Merchant as such:
That same business on a Three (3) Tier system would have all their Debit Cards wrapped into the First Tier charge of 160 Basis Points. Not very fair to the business owner. They would be paying 140 Basis Points for "nothing" on every Debit Card accepted!!
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