There are simple, no-cost ways to reduce the cost of debit/credit card processing for your company by as much as 50%! Here's the first of four money-saving tips.
1. Earn the lowest rate using Address Verification Service (AVS).
Earn the lower of non-swiped rates by fully matching addresses and ZIP codes.
If your credit card terminal is not prompting you for the billing address and zip code of a manually entered credit card number, you are paying a much higher rate for that transaction. Visa and MasterCard now impose a surcharge if you do not enter address information or if the information does not match the cardholder's billing address.
Visa and MasterCard have experienced higher rates of fraud when a customer does not readily know the billing address of the card. When credit cards are stolen thieves rarely have this information at their fingertips.
If the address does not match your printed receipt it will read "AVS mismatch." The card will still be approved if there is sufficient credit, but armed with this information you can now make a better decision as to if you want to take this sale. Even though you have an approval, a mismatched AVS will result in a higher rate charged to your business. A full match of the address and zip code is the only way to earn the lower of the two non-swiped rates. This rate is usually referred to as the "mid-qualified rate."
2. Reduce fraud with Card Value Verification (CVV).
Reduce fraud with easy-to-verify security code matching.
On the signature panel of newly issued credit cards there is a three-digit number called the Card Value Verification (CVV). Credit card terminals can be programmed to prompt for this number as a way for businesses to check potentially fraudulent purchases.
When a credit card terminal dials for authorization it will also check Visa/MasterCard's computers for a match of the CVV. Visa/MasterCard doesn't offer a lower rate for entering this number, but it will help detect potential fraud. A mismatch of the CVV will not decline the approval of a card, but an error message will appear on the terminal screen and the receipt it prints.
You have every right as the merchant not to accept payment of a transaction on a card that is suspicious.
3. Debit Cards cost less to process than credit cards.
Steer customers toward debit cards that cost less to process than credit cards.
Almost all debit/check cards issued by banks today have a Visa or MasterCard logo on them. This means debit cards can be run through your credit card terminal as if they were a standard credit card. Visa/MasterCard have recently offered a lower rate for processing debit cards than credit cards. Check with your credit card processor and request this lower rate for debit cards that should be about 1.55%.
4. Batch and close out your terminal every night.
Avoid surcharges by setting up your system to automatically batch out each night.
After a credit card sale is run there must be a "batch out" for the sale to be finalized. Batching (also called "closing") is usually done at the end of a business day. Batching out settles the sale and starts the process of depositing the sale amount into your bank account. If the batch close is done more than 48 hours after the original sale (authorization) the rate for these sales will be surcharged. This surcharge is usually 1 to 2% of the sale.
By setting a self-reminder to batch out the terminal every night a merchant can ensure they are not penalized. Another option is to have your terminal set up for "auto batch" where the terminal closes itself out at a set time programmed into your credit card terminal. Check with your credit card processor to see how you can set up auto batch or auto close.
Any tips you'd like to share?
We'd love to hear from our customers and as well as users of other card processing companies.
the last three money-saving tips in this list. (We've got plenty more.) Thanks for reading!