Basically your provider has a set rate that they cant go below. This rate applies for all transaction, qualified, mid and non-qualified. What they do is give you a rate at exactly .12% over their cost.

This does not necessarily mean that it is cheaper than anyone else. Basically you need to know what their cost is before you can determine whether it is actually cheaper than anyone else. Since providers have different contracts with processing banks, there really isn\’t any good way to tell how much they are going to charge. Also, since the fees for keyed entry and swiped are completely different, that is something else I would need to know. If the company you are looking at is a large company there is a better chance that they have a good buy rate.

If you can post how you intend on actually processing cards, I will try to come up with something for you.

A few things you should look out for. Check your transaction fee because this is often an area where companies make up any cost from a low processing rate.

ISO’s can potentially get 40 cents on a $100 transaction. It totally depends on the rate that they set for their customer, and what they set the transaction fee at. ISO’s often raise the transaction fee a lot to make their processing rate seem more competitive.

To make $.40 per a $100 transaction they could have a $.25 transaction fee, and be making 15 basis points on the processing fee.

Interchange fees go to the card issuing bank.

Interchange for retail is approx 1.55% for Visa. This completely goes to the card issuer.

A business would commonly see something like 1.7% as their quoted rate.

For this example, the Card Issuer is now taking 91% (1.55%/1.7%).

The processor has their assessment fees which for the sake of simplicity, we’ll say is 10 basis points over interchange or .1%. This means that the processor is getting 5.8%. (.1%/1.7%)

The remainder 3.2% in this case, goes to the service provider.