Want to lower your interchange rate?

Interchange fees can be extremely high for some merchants. If they are too high for you have you considered upgrading your credit card processing equipment to handle Level 2 or Level 3 data?

There are two different levels that you can pick from. Level 2 allows you, the merchant, to get a lower interchange rate by providing more details about the transaction therefore simplifying the transaction and making it safer. Your credit card processor has decided that with the more information provided about the transaction the less likely it is for fraud to occur and thus are willing to give a merchant a break financially. What information is included? The merchant name, the transaction amount, the tax, the date of the transaction, order number and zip code. No, you don’t have to gather your customer’s social security number or driver’s license number. Perhaps the best part of this is that equipment can be installed that will do this all for you!

Level 3 may or may not be something you may want to look into. Do you accept a lot of government credit cards? Is your business in a heavy industry? If so then consider an upgrade to Level 3. This is one step beyond Level 2 as far as gathering information. Shipping information is gathered, item product code, quantity and description, freight amount and duty information is some of what is collected.

Upgrading to Level 2 or Level 3 can save you a significant amount of money. The percentage of your interchange fee that is returned to you may be small, in some cases only .25% but it can range up to nearly 1% and that can really add up. Just like the 9/10 of a cent that is charged with a gallon of gas, those little quarter and half a percentage keep on adding up, a few cents here, and few dollars there, amongst the potentially hundreds of transactions a day.

As a merchant you are hopefully interested in saving money and as such are interested in at least upgrading to Level 2. Yes there is a cost to upgrade your equipment but sometimes you have to spend money to make money. You will make that back and have the peace of mind that your transactions are more secure.