Mastercard and Visa change their fees
Visa and Mastercard have both announced rate adjustments effective January 1, 2019. Visa has announced that their base assessment fee will increase to 0.1017% in Canada and to 0.14% in the USA, and Mastercard has announced a reduction to the Mastercard interchange rates with the average rate reduction for the affected card types being about 0.12%.
To provide context for how a rate change can affect what you actually pay for processing, a rate change of 0.01% (approximate Visa rate increase) would affect the amount merchants pay for processing by approximately $1.00 for every $10,000 in transactions processed. Whereas a rate change of 0.12% (The average Mastercard rate reduction) would result in approximately a $12.00 savings for every $10,000 processed.
Benefits of Interchange+ Pricing
Interchange+ pricing, or Cost+ pricing, is widely regarded as the most transparent pricing structure in the industry while delivering merchants the most savings. With Cost+ pricing, the reduction of the Mastercard interchange rates will automatically be passed on to Helcim merchants. In this pricing structure, our margin (which is displayed clearly on our website for merchants to see) remains the same on top of the base interchange fee, which changes depending on what type of card, payment type, and business is involved in the transaction. So, if the card brands change their interchange fees, the amount you pay will change to reflect that.
But What About Flat Rate Pricing?
If you have a flat rate pricing structure with your processor, while the flat rate makes statements easier to understand, the reduction in card brand interchange rates will not result in lower processing fees because you are paying the same fee for all of your transactions, regardless of card type and industry. While flat-rate pricing may be easier to wrap your head around, it's worth taking the time to understand how Cost+ pricing works because it can potentially mean significant savings.
Looking to Switch Payment Processors? Now Is the Time
Luckily, Canadian merchants who are concerned that they are paying too much for their credit card processing, or who were previously unhappy with their payment processing agreements, can use the Code of Conduct for the Credit and Debit Card Industry to their advantage. The code of conduct requires that merchants receive a minimum of 90 days notice for any fee changes, and once they've been notified, they are allowed to cancel their contracts without penalty. This means that if you are a Canadian merchant stuck in a lengthy contract and would like to get out of it, you are now able to cancel without penalty. It is important to note that while you can cancel your account without penalty, this does not extend to equipment leases.
If you're currently looking for simple and affordable payment processing, Helcim offers interchange plus pricing which means that reductions to the card brand fees will automatically be passed on to your business. We are committed to transparency when it comes to pricing and fees so you can find all of our rates on our website, and we offer a rate guarantee where our margin remains the same for as long as you have an account with us, and never increases.