Five Costly Mistakes that Increase Your Cost of Acceptance

February 21, 2019 4:20 PM
By: Lorde Astor West

Five Costly Mistakes that Increase Your Cost of Acceptance

Here are five mistakes that merchants can easily avoid that will reduce the cost of acceptance, lower the amount of risk, increase retention rates if surcharging, and reduce the number of chargebacks.

 

Your business is Misclassified

Industry codes are used by card brands to assess risk. The riskier the business the higher the interchange rate. Mastercard alone has over 40 interchange programs that can result in higher fees based on the type of business you are in. To avoid higher rates, make sure your business has the correct Industry type and SIC code.

 

You are not Settling Authorizations after Transactions in Time

Settling batches closer to the transaction date reduces the risk of fraud and chargebacks, resulting in lower interchange fees for the transactions contained in each batch. Get in the habit of batching and settling nightly, never force settlements without authorization, and avoid tip-adjusting the settlement.

 

Missing Data

Credit card brands use data as a means of assessing risk. Missing data means higher risk and therefore higher rates. To avoid downgrades (increases in the rate charged to a transaction) be sure to perform AVS on every transaction and ensure the E-commerce Indicator Flag (ECI) is being attached to your transactions by your service provider. 

 

Not Opting for Fraud Prevention Programs

Opt-in for programs such as “Verified by Visa” and MasterCard’s “SecureCode” to reduce the risk of fraud and chargebacks, and to avoid higher interchange fees.

 

You Have Not Switched to a Cheaper Processing Plan

The biggest mistake merchants make when shopping for a processor is choosing the wrong processor plan. Many merchants fall prey to predatory tactics that advertise low “qualified" rates but fail to inform merchants that very few transactions ever qualify at the lowest rate. A classic bait and switch tactic but nonetheless one that happens continuously.

These are just a few tactics you can add to your price optimization strategy. To ensure you are keeping every dollar you earn contact our team for a full review. Simple adjustments such as the ones mentioned above can help you recoup significant profits lost to unnecessary fees.

 

Lorde Astor West

 SCRATCH | Founder & CEO

Astor is a pioneer of the modern Web and Arizona native. Since 2003 she has been helping businesses keep what they earn by developing technologies that streamline and automate complex processes.  Astor has created an eclectic portfolio of innovative brands that include Cloud, FinTech, Data, Media, and E-commerce. To date Astor has developed a cloud rapid development framework, several platforms, and countless cloud Apps.  Astor is a mother, grandmother, and wife who loves building innovative technologies that help businesses keep what they earn, walking her rescues and promoting local businesses. 

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