Payment Processing Decisions Made Easy

Payment processing interchange tables are complex. Payment processing providers have multiple ways to quote rates. Most merchants do not have the expertise to understand the true cost of payment processing.

The easiest way to determine payment processing rates is to calculate the effective rate. The effective rate calculates all fees charged for payment processing and reduces fees into a single easy-to-understand number.

Here’s how to calculate the effective rate of your credit card processing.

1. Assemble your most current past 3 months of credit card statements in order to establish a baseline. Processing statements can be hundreds of pages long. Don’t worry. You are interested only in the information that shows how much you are paying for processing. These pages are usually either the first or last sections on the payment processing statement.


2. Add up all the payment processing fees associated with your account. Common payment processing fees Include discount rates, transactions, batch header file fees, AVS, and PCI compliance. Sometimes statements are difficult to read and specifics of fees are not listed. However there will be a figure somewhere on the statement with the details of how much you are paying.


3. Divide the total amount you are paying by the total amount of credit card processing.


4. Multiply by 100 to convert to a percentage.


5. Congratulations. You now have your effective payment processing rate.

The effective payment processing rate is simple way to cut through all the complexities commonly associated with payment processing. It quickly gives you a bottom line costs to help you determine the best payment processing solution for your business.

Naturally, there are other considerations that factor into your decision on payment processing. For example, every payment processing provider promises the best service. Test the claims out for yourself by calling the customer service department. How long are you on hold? Can you speak to a real person? Or, if you leave a voice mail message, how long does it take to receive a call-back? How are you treated?

Payment processing is among the most important part of your business. Take your time to evaluate your payment processing options. You’ll discover it’s time well spent.