Q&A with Elavon for APA Members

By Stacey L Kurtz, Elavon

How can I maximize my credit card processing?

There is no guaranteed path to a successful business. But there are successful strategies. One key strategy is how to process payments. Like all solutions, the ability to accept credit cards has its price. Besides the initial installation of software and equipment purchases, there are the ongoing fees a practice has to pay on every credit card transaction they process. Below is some basic information to help you make the most of your payment processing account.

Be sure that you and your associates swipe credit and debit cards through the terminal whenever possible. There is less risk associated with a swiped transaction and it will result in the lowest possible rate.
PIN debit transactions are generally lower in cost than credit transactions.
Make sure your equipment is up-to-date, i.e., prompting for security codes and billing addresses when necessary. This will also ensure lower transaction fees and fewer downgrades.
Make sure to batch and settle daily. Transactions not batched and settled in a timely manner can incur additional fees.
Input all requested data.
PCI compliance.
If you are accepting orders via the phone or over the Internet, consider setting up separate accounts for those transactions.

How do I select the right payment terminal?

Ask yourself these questions:

Have you had any occurrences of credit card fraud or experienced numerous chargebacks with your phone order or non-swipe transactions?
Have you incurred any additional fees on your statement because of card not present transactions?
Does the speed of your current terminal keep up with the pace of your business?
Do you ever need to batch out more than once a day?
Do you have much employee turnover?

Understanding Credit Card Processing

What is interchange?

The most misapplied term in credit card processing is discount rate. This term is applied to the percentage of each sale a merchant pays to process a credit card sale. To call it a discount would suggest something is being reduced ... but it’s not. It’s a fee merchants pay to their processor to handle the transactions and deposit of credit card funds into their bank accounts.

The “discount” rate begins with interchange — the base fee assessed by credit card companies and distributed to card-issuing banks. Interchange, of which there are more than 100 different rates and categories, makes up the largest portion of the so-called discount rate.

How does interchange affect transaction costs?

Although interchange fees are applied to all credit card processors equally by the card associations, namely VISA^® and MasterCard^®, they fluctuate in amount based on a variety of factors. Factors include:

How you process – Merchants processing transactions in a mail, telephone or Internet environment pay higher interchange fees when a cardholder is not present for the sale, which creates a higher risk of charge backs.
How the card account number is captured – Merchants receive a lower processing rate for all transactions swiped through a magnetic-stripe reader (credit card terminal or card reader), because the encoded information on the back of the card can be verified through the issuer. When a card cannot be read through a magnetic reader, merchants need to get a manual imprint of the card, if possible for protection against potential chargeback.
Amount of data submitted with each transaction – Visa and MasterCard have multiple levels of qualification. For example, transactions accepted by telephone that do not meet the requirement, such as when only a partial address is provided for Address Verification (AVS) are assessed higher rates, which are passed on to the merchant.

Stacy L Kurtz is the Account Executive (Relationship Manager) at Elavon for the endorsed merchant processing program for APA. We asked Elavon to write an article on these questions after a number of our members reported being approached by multiple salespersons that provided conflicting information about them.

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