News Briefs and Fees

News Briefs

Interchange Regulation

The National Retail Federation and the Retail Industry Leaders Association have asked the US Supreme Court to let stand an appeals-court ruling. This ruling had struck down the 5-year old Interchange rate settlement. The trade groups that represent large retailers argue that the settlement provision to allow merchants to add surcharges for credit card transactions, has done little to aid those merchants. The surcharging restrictions, which were loosened under the card-brand rules, allowed merchants to charge the lesser of the actual acceptance costs, or 4% of the transaction amount. Surcharging is currently allowed in 40 states. For now, even though the settlement has been thrown out by the appeals court, surcharging is still allowed because the card networks have not reworded their rules put in place due to the settlement.

Payment Fraud

Counterfeiting cards is still the largest type of fraud in the payment industry, but probably won’t be for long. The Federal Reserve recently released a payment study that shows, “fraudulent use of card numbers” is fast over taking counterfeiting. This fraudulent use of card numbers is another name for a card not present, web based, or internet based fraudulent orders. This is a direct result of the new EMV chip based cards that are harder to counterfeit.

Mobile Processing

Mobile Commerce now comprises 21% of all online orders, according to comScore Inc. (a based data-measurement firm). This growth is up 45% from the year before, for the 4th quarter of 2016. This shows that retailers are doing a much better job at making their sites more mobile friendly. This also foreshadows the increasing growth of mobile wallets in the years to come.

Just about every Merchant Account has monthly set fees. Some call these,“Padding Fees” and I’ve seen all kinds of names for various fees on merchant statements. What are they? Am I getting ripped off? The best answer without looking at your statement is: Maybe. It depends on how many of these fees you have, and how high they are.

More fees?  What am I paying for?

To keep an account on file or active status, it costs money to your processor. If a merchant doesn’t run anything on their account, and lets say they don’t have any kind of monthly fee, the processor or sales office is losing money. Sales offices are charged an, “on file fee” from the bank they have placed the account with. This fee can range depending on the agreement between the sales office and the bank, however there is always some type of fee. To cover the cost, most providers simply pass this on, typically as a statement fee. Over the years some started calling it a service fee or support fee and so on. Sometimes I see where a merchant is getting charged a statement fee AND a support fee AND some other type of monthly on file fee. While having one of these charges is common, if you have a myriad of these on your statement, it may be worth a call to your processor to make sure what the charges are for.

Statement Fee – (Service Fee, Support Fee, On-file Fee, Terminal Service Fee) This is a generic fee to help offset the costs of maintaining an account.

PCI Non Compliance Fee – (Non Supported Terminal Fee, Non PCI) This is in effect, a fine from your processor for not being PCI-DSS compliant. This can be removed by completing your compliance requirements, or providing a copy of a valid compliance certificate to the processor.

PCI Service Fee – (Annual PCI Fee, Monthly PCI fee) This fee covers the cost of the PCI Certification Vendor. You might be able to get this fee removed if you already have a PCI certification vendor you are working with, however most processors still won’t do it, because the PCI Certification Vendor also maintains all the PCI records for the processor, even if you are using another vendor.

Regulatory Product Fee – (IRS Reporting Fee, Reg Fee) This fee covers the cost of managing reporting requirements.

Terminal Rental Fee – (Terminal Service Fee, Rental Fee) A charge for equipment that is rented from the processor. If you have a rental fee, you should really consider purchasing a terminal, or shopping around for other processing options. Credit Card terminals are cheap, and removing a rental fee generally pays back in less than a year.