Sabtu, 04 Juli 2020

Visa Cards Are Generating a Bundle of Money What's the Merchant Providers Fee?

How is their money is generated?

To be able to make their money, Visa charge massive merchant charges when a customer uses a debit or credit card, and since just about all credit / debit cards use Visa or MasterCard there is no surprise this huge giant's earnings are tremendous. Perhaps it's in order to satisfy the shareholders' need for enormous dividends that drives them to charge these sorts of merchant charges, who knows. In any case there is simply very little need to cripple individuals that pay the premiums in order to satisfy this appetite for income.

These costs fall to the retailer who pays through the nose for their credit payment processing. As outlined by the British Retail Consortium (BRC), because of the high merchant premiums, in the UK the average debit card payment charges the retailer around 8.5 pence per transaction, and for credit cards it's a enormous 33 pence!

Not only do stores have to pay these merchant charges, in many cases they also have to cover their debit card terminals and other payment processing hardware, and maintain them too. All this is in order to survive the changes in payment processing and keep in advance of retail trends, when the payment processing companies, banking institutions and world-wide giants like Visa are making an absolute fortune.

The true cost

For these merchants to survive the inordinate merchant charges charged by their payment processing they are compelled to increase prices or risk losing business by rejecting card payments. In many cases merchants will raise the price of products to be able to maintain their own revenue margin. This affects every customer, even individuals that do not use debit cards, because the retailer is not allowed to charge different prices for items depending on the payment method chosen by the client; therefore those clients paying in cash are in fact penalised because of the merchant premiums relating to accepting debit and credit cards.

The solution?

There are two answers to the problem and the first is to not take debit and credit cards. If you do not have Chip and PIN devices on your business premises and you do not intend to get them then you will obviously not have to pay the merchant charges. Yet is it really worth losing all the business you can get by accepting credit cards? This firm is huge, and the amount of clients paying with debit cards is on the up. According to the BRC, in 2009 debit card sales accounted for over 44%. There is an alternative answer however.

The other answer is to choose a payment processing company that doesn't charge the earth and is more tailored to the size and operation of your business. There are payment processing companies out there who cater solely for SMEs (small and medium enterprises), and these organisations can often provide a much more competitive rate.

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