Industry Terms: Basis Points

Wednesday, September 26th, 2012 by Steve Myers in Industry News, Knowledge Base

This is the latest installment in The Official Merchant Services Blog's Knowledge Base effort. Well we want to make the payment processing industry's terms and buzzwords clear. We want to remove any and all confusion merchants might have about how the industry works. Host Merchant Services promises: the company delivers personal service and clarity. So we’re going to take some time to explain how everything works. This ongoing series is where we define industry related terms and slowly build up a knowledge base and as we get more and more of these completed, we’ll collect them in our resource archive for quick and easy access. Today's term is Basis Points, a term used frequently in the industry and one that is pretty simple to understand but very important to all merchants that take credit cards because they apply to every pricing structure out there.

Basis Points

Basis Points are a unit of measurement with a value equaling one one-hundredth of a percent ( ¹/₁₀₀ of 1%). Basis Points, typically denoted as bp, are sometimes referred to colloquially as "bips" or "beeps." The same unit of measurement is rarely called a permyriad -- literally meaning 'for every myriad ten thousand' -- and will have a strange looking symbol that looks like a percent …Read full story