There are two kinds of major fees involved in take card payments for credit card processing fees, like the interchange rate and markup of the payment processor take card payment. Markup rates can be vary depending on the fraud risk in the transaction, as well as in the payment plan and particular processor. It is important for a small business owner to learn about payment plans.
If you’re interested to know about the payment plans, here are the things you need to know about the type of payment plans.
Take Card Payments Types of Payment Plans You Might Encounter
1. Interchange-Plus Plans
Interchange-Plus Plans in take card payment rolls interchange rate of the card company and markup fee of the processor into one fee. Typically, the markup is a small percentage of a fixed dollar amount and the interchange rate.
2. Tiered Plans
Traditional merchant accounts often have either interchange-plus plans or tiered plans to take card payments. It will charge you a different fee if you have a tiered plan in the processor. It is depending on the transaction types that are taking place. You may have a greater fee if you do the transaction with a big risk. Factors like the payment method, such as in-person, online, or over the phone and the type of credit card that involved in the transaction, like miles card, business credit card, or rewards card will help you to determine risk.
Tiered plans can become costly in your business budget since you can’t predict which tier the processor places in the transactions. You can never really know how much you will be charged as a result per transaction.
Those are some information about the type of payment plans you can find out in take card payments. Make sure you have to know and understand the payment plans for your small business that will bring you to benefit in the future.