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Effective April 1, 2006 reward cards (those cards that offer cardholders points, cashback, or other benefits with each purchase) will be processed as non qualified transactions. This will result in higher processing charges for transactions involving reward cards.
Anyone else seeing this increase? It seems like pretty much everyone uses some sort of reward card these days. Our non-qual rate is a bit less than half of our fully qualified rate, which is fine because our non-qual has been almost nil. Now it will be a huge percentage of our volume. This is crazy!
A question to those close to the inside of processing: is this coming from across the board interchange price increases or just this processor sticking it to us?
business cards, rewards cards, international cards etc. will all do it to you
my conclusion was to go one of 2 ways - if you are small (less than $50k per month) then go to paypal because their new program is an absolute flat rate of 2.something with no downgrades - if you are bigger, get on to a interchange-plus plan - guess what? - your processor will never tell you this even exists, but if you are persistent, you should be able to get it set up - ours takes effect 4/1
Nice eh, wish I could come up with some fancy consumer marketing schemes and then just pass the costs of them on to my suppliers.
Gotta love Monopolies! And let's face it Visa/MC are the same frikkin company. Choose Coke or Pepsi - They'll both rot your teeth.
Of course, then all the merchants would refuse to process them, and the card holders would complain to the card companies that the cards are unusable, and the card companies would have to drop the extra charges. So you know that ain't gonna happen!
I see a class action lawsuit in a few years when all the merchants band together, similar to the lawsuit a few years back regarding processing debit cards. So everyone- make sure you save those monthly statements to prove the higher "unqualified" charges that are being forced upon you.
By the way, I'm interested in knowing what processor you use. Please sticky me if the mod won't allow you to post the name.
yup, this is what we have been hearing from our processor. thing is, if you get set up on interchange-plus, they pass through the wholesale interchange costs plus a few basis points - we were able to negotiate .12 for the processor - this means that the highest fee we'll pay (one of the rewards cards) is going to be 2.65 plus our .12 for a total of 2.77% - before interchange plus, this card was costing us a total of over 4% - of course the processor was pocketing all of this fluff...