Credit Card Acquiring BlurCredit card acquiring can cause much head scratching for companies. With all the recent changes in the market, it can be difficult for companies to stay on top of their card acquiring operations and requirements. Our experience of working closely with hotels and retailers has revealed the following challenges that they have to face with card acquiring costs.

 

How to choose the optimum pricing model that best meets your business requirements?

There are a number of different pricing models available to companies. Blended pricing is the most recognized model and most merchants will be familiar with what blended pricing looks like. Interchange+ and interchange++ pricing are relatively new and are based on acquirers(the credit card payment processing company) charging a fixed margin over interchange fees and interchange and scheme fees respectively.

The optimum way for merchants to evaluate which pricing model best suits their business requirements is to build a profile of their card activity covering a 3, 6 or 12 month period and then apply the different pricing models to the profile. This can be a time-consuming process but companies are left with little other option if they want to determine what model offers them the best value regarding price and service.

 

How to validate card acquiring costs on an ongoing basis?

Card Acquirers typically apply charges to their customers(your business) on a monthly basis with the business seeing a single payment leaving their bank account. The acquirer will then issue the business with a summary of charges broken down by card type and volume.

Companies find it very difficult to validate that what their acquirer is charging is in accordance with the pricing as per their contract and so there is a certain amount of ‘blind faith’ required by the business. Naturally the charges can be validated but businesses rarely have the resources or the capability to complete this process accurately. This is especially the case for retailers and the hospitality sector.

 

How to minimize premium charges?

Premium (exceptional) charges are applied when insufficient detail is recorded at the time of a card transaction. For example, a manual entry of card data with no other forms of verification will incur a premium charge. The challenge for businesses is to understand how exceptional charges arise in the first place, establish their exposure to these charges and then to change internal process to ensure that future exceptional charges are minimized.

 

How to best manage an RFP process for your card acquiring?

Getting the best pricing and service on your card acquiring can involve going to market to talk to different providers. Evaluating proposals received from acquirers can prove onerous to merchants. Typically each acquirer has their own way of denoting transaction types and associated charges. This lack of transparency makes it very difficult to compare the pricing outlined in the various proposals.