New debit card legislation will have the federal government policing the interchange rates charged to merchants for their customers debit card transactions. While the specifics of the new law are being worked out, here is what merchants can expect.
1. Merchants could set a $10 debit card transaction minimum.
2. Merchants would be allowed to offer cash discounts for use of cash over a debit card.
3. Government debit cards and reloadable pre-paid cards would be exempt.
4. Banks with over $10 billion would be subject to the fee oversight.
5. Fees would have to be reasonable and proportional to processing costs. The Feds have 9 months (after the bill was signed into law) to figure this out.
With over 1.6 trillion dollars in total debit card purchases in 2009, this new legislation is sure to have an impact on all parties involved, large and small. Whether the impact will benefit the consumer is yet to be seen. Some are speculating that the cap on “swipe” fees will only benefit the big retailers like Wal-Mart and Target, while consumers end up fitting the bill with less bank services, and minimum transaction amounts.
Saving money on credit card processing fees can be as simple as maintaining credit card terminals. Improper cleaning and maintenance can lower the “swipe-ability” of credit and debit cards, ultimately costing merchants more to process them. Here are a few quick, and easy tips to maintain your terminal.
1. Clean the magnetic stripe reader on the credit card terminal frequently. Card reader cleaning cards can clean the read head and entire track of a magnetic stripe reader in one pass. Or, try a clean new dollar bill wrapped around a credit card, and swipe through the magnetic reader. Compressed air can also remove lint, crumbs, and other contaminants from the machine.
2. Replace old terminals that are not reading credit cards like they used to, or consider replacing just the magnetic reader.
3. Complete terminal failure may indicate loss of power, the need for the machine to be reprogrammed by the merchant services provider, or a broken terminal. First check the power source, if there is power to the unit-a simple reprogram may be needed. If the unit is plugged-in and there is no response, the terminal may need to be repaired or replaced.
Proper cleaning, maintenance, and replacement of non-functioning credit card terminals will improve swipe rates, and save merchants money on downgraded, keyed-in transactions.
1. Fast Funds. It takes third party processors, like Paypal, several days-up to a week to allocate funds. PaymentMax Processing will have all credit card funds deposited next day.
2. Record Keeping. Third party processors do not release any information regarding the cardholder. This information can be imperative in copy requests, and chargeback disputes.
3. Lower chargebacks. Having your own merchant account will properly place your DBA (Doing Business As) on the customer’s credit card statement. Third party processors do not list DBA’s which can cause confusion, and spark a chargeback request.
4. Save money. If you are processing over $500 dollars in credit cards through a third party processor-you are paying too much, much more than a merchant account.
5. PaymentMax will “give back” a percentage of net processing fees to documented non-profit organizations.