Merchant Service Advisor

apply today

Signing up is a simple step away.

Beware rewards and corporate cards

December 2009

Most merchants with other processors will experience the shock that the rate that they thought they were paying to accept credit cards is significantly lower than the actual rate that they’re paying each month.  Why?  Because many credit card processors sell teaser rates, such as 1.69% or even lower rates to bait unsuspecting merchants into signing up.  These merchants are then surprised when they receive their first statement and see that they’re paying significantly more.   These teaser rates are not applied to rewards cards and corporate cards which can account for more than 80% of the cards that a typical merchant accepts.
What are rewards cards and corporate cards?  Rewards cards are simply credit cards that provide rewards such as mileage or cash back to the users and are more common than any other cards.  Just look in your wallet and you’ll likely find a card that offers you either airline mileage, cash back or affiliation with an organization, these are all rewards cards.  Corporate cards are those issued by a business to their employees and carry higher rates as well.  The fact is that the business who processes the credit card actually pays for these mileage and cash back rewards via higher processing rates.  These cards may reward the user, but they penalize the merchant.
So on your credit card processing statement you’ll see a “downgrade” fee for these cards.  Some processors take these fees daily, and others lump these charges together in one charge at the end of each month.  So that low rate that you thought you signed up for turns out to be much higher when you add up all the fees shown on your monthly statement.  Some processors go a step further and make their statements so difficult to understand that the merchant simply gives up.
As a general rule of thumb 10% of your transactions will come from standard/qualified cards, 60% from mid-qualified/rewards cards, and 30% from non-qualified/corporate cards.  So beware rewards and corporate cards and make sure that you ask your processor how much they will charge you for these cards as they make up the majority of the cards that you receive.  If they tell you that all cards will be processed at the same rate, they simply do not know what they’re selling.

Most merchants with other processors will experience the shock that the rate that they thought they were paying to accept credit cards is significantly lower than the actual rate that they’re paying each month.  Why?  Because many credit card processors sell teaser rates, such as 1.69% or even lower rates to bait unsuspecting merchants into signing up.  These merchants are then surprised when they receive their first statement and see that they’re paying significantly more.   These teaser rates are not applied to rewards cards and corporate cards which can account for more than 80% of the cards that a typical merchant accepts.

What are rewards cards and corporate cards?  Rewards cards are simply credit cards that provide rewards such as mileage or cash back to the users and are more common than any other cards.  Just look in your wallet and you’ll likely find a card that offers you either airline mileage, cash back or affiliation with an organization, these are all rewards cards.  Corporate cards are those issued by a business to their employees and carry higher rates as well.  The fact is that the business who processes the credit card actually pays for these mileage and cash back rewards via higher processing rates.  These cards may reward the user, but they penalize the merchant.

So on your credit card processing statement you’ll see a “downgrade” fee for these cards.  Some processors take these fees daily, and others lump these charges together in one charge at the end of each month.  So that low rate that you thought you signed up for turns out to be much higher when you add up all the fees shown on your monthly statement.  Some processors go a step further and make their statements so difficult to understand that the merchant simply gives up.

As a general rule of thumb 10% of your transactions will come from standard/qualified cards, 60% from mid-qualified/rewards cards, and 30% from non-qualified/corporate cards.  So beware rewards and corporate cards and make sure that you ask your processor how much they will charge you for these cards as they make up the majority of the cards that you receive.  If they tell you that all cards will be processed at the same rate, they simply do not know what they’re selling.

    World Class Payment Solutions

    Here are just some of the money saving solutions that Winery Payment Solutions offers.

    One Account for Everything

    You don't need multiple accounts, statement and monthly fees for Visa, MasterCard, Discover and American Express. Stop paying additional monthly fees for statements when you can have a consolidated statement and one account for all your transactions. In addition you don't need a separate merchant account for E-Commerce, Retail sales and Mobile payments. All you need is one merchant account for all your sales channels and no additional fees.

    Online Terminal

    If you'd like to accept payments without a credit card machine to further reduce your costs and power your wine club, you can use our virtual terminal for all or some of your transactions. You can also connect a card reader and receipt printer to your PC and have credit card machine wherever you take your computer.

    Electronic Checks

    With our award winning check processing solutions you can scan a check and get paid fast. If you want to stop going to the bank every day to deposit checks, or you want to make sure a check is good before the customer leaves, our e-check solution is right for you.

    Gift Cards

    Offer your customers the option to buy and pay with gift cards. With every merchant account, you get the first 50 standard gift cards for FREE.

    Low Cost Credit Card Machines

    With any merchant account we offer credit card machines to meet your needs at the lowest prices possible. Don't fall for a free terminal, there will be fees charged later to make up for the "giveaway".

    Already with another provider?

    We'll pay your termination fee if you move your account.

    That's right, if you're staying with your current provider just because they'll charge you a fee to leave, and you're processing more than $10,000 in credit card transactions per month, Winery Payment Solutions will reimburse you up to $150 if you move to us. Subject to account approval, call for details.

Call Winery Payment Solutions, Inc. at 800-993-6300.

© Copyright 2024 Winery Payment Solutions, Inc.

I don’t have to worry about surprise rate increases any more.
Daniel D., Back Room Wines
View more
testimonials