Every merchant who accepts Visa debit or credit cards is subject to transaction and processing fees. The determination of what those fees, known as custom payment services (CPS) fees, will be follows a complex maze of calculations based upon such things as the type of card the customer uses, the volume of credit card transactions the merchant processes in a given time frame and whether or not the card is actually presented to the merchant. Added to the mix in late 2012 was a transaction integrity fee (TIF), which Visa charges for all non-compliant transactions in an attempt to get merchants to begin providing all the information needed to ensure that the customer is a legitimate user of the card.
There are steps a business owner can take to meet the Visa CPS requirements. The easiest way is to install a card reader in each of your locations that accept credit cards and require your customers to swipe their cards to pay for the purchases. Additionally, you should encourage customers to opt for a debit transaction rather than credit whenever possible. Many customers prefer not to do this because it requires them to entire their four-digit PIN number, but Visa charges its lowest fees for debit transactions. Some merchants are beginning to add a processing fee to all credit card transactions in order to encourage customers to choose the debit option.
Visa also charges a higher fee for card not present transactions, such as phone, mail order or online purchases. These are the types of transactions that will typically be subject to the new TIF. However, you can reduce your risk of being assessed TIF by ensuring that your systems are submitting all the required information to Visa. One of the most commonly missed pieces of information is an address verification system (AVS) request. If you do not request this at the time the transaction is submitted for approval, it will be subject to TIF.
Another step you can take to ensure that you are meeting the Visa CPS requirements is to batch and submit your sales on a daily basis. Not only does this begin the process of transferring the funds from Visa to your bank account, it also saves you money. Failure to close out your sales within 24 hours following the first transaction will result in higher fees. Host Merchant Services can provide you with auto-batching terminals so that one more task is off your plate.
Although it can be difficult to determine the type of card being used in each transaction, merchants can take steps to minimize their processing costs by meeting simple Visa CPS requirements. Taking a few moments to review your systems to ensure that you are submitting compliant transactions and doing all you can to encourage customers to choose a debit transaction over a credit transaction are the easiest ways to ensure that you qualify for the lowest fees possible for the your merchant classification and transaction types.