What About Rates?

• Discount rate is the percentage of each sale that is charged to process transactions. The rate is based on risk, average sales ticket, transaction type, and total charge volume.
• Discount rates can vary depending on the type of card and level of risk associated with the transaction, whether it is a card present or card-not-present transaction.
• Card associations (Visa, MasterCard) set and drive the pricing of rates.
  • Unlike Visa and MasterCard whose members are card-issuing banks, American Express and Discover operate as independent entities and set their own rates entirely, which are often higher.
• Swiped or card present transactions have lower rates than MO/TO and Internet (card-not-present) transactions because they are less likely to be fraudulent.
• Rewards cards and corporate cards result in higher rates from Visa and MasterCard, even if they are card present transactions.
• Manually keying in transactions (card present or card-not-present) results in higher rates because Visa and MasterCard consider them riskier transactions.

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