Pricing
The pricing for transactions or card acceptance that a merchant will negotiate with their acquiring bank is known as their merchant service charge (MSC).
It is not possible to provide facts and figures on pricing as this will depend on the nature of a merchant’s business and how it operates; pricing will be decided by negotiation between the merchant and their prospective acquiring bank. However, this website can provide information on the key elements involved in pricing to help merchants understand the basis on which pricing is determined and how a MSC is calculated.
As with all costs to a merchant they will want to negotiate the lowest rates for their card acceptance. It is worth reflecting on how cards could improve a merchant’s business when making a judgment as to whether they will be getting good value for money; below are a few areas to consider:
- By not accepting cards, a merchant may be at a competitive disadvantage.
- Cards are a highly effective way of taking a payment. Merchants should consider what would be required to take cash or cheques, for example providing change and making sure any notes are not counterfeit, and banking the takings.
- With a comprehensive statement of what has gone through the terminal a merchant can easily track sales and create a better understanding of their customers’ payment preferences.
- An acquiring bank’s service may also include access to a comprehensive call centre to help merchants experiencing difficulties with their card transactions e.g. if a merchant’s bank owned terminal is not connecting properly, their acquiring bank will advise what course of action should be taken. In addition, they will help with any requests for information or chargebacks made on card transactions they have accepted.
- With card purchases credited directly to the merchant’s bank account by direct debit, they can track sales on a daily basis to spot the busiest times in the week and staff accordingly.
- An agreed MSC, enables a merchant to easily track their card processing costs and budget for these.
- The MSC is taken by direct debit from a merchant’s bank account thereby reducing administration.
