Higher Discount Rates than Quoted?

Discussion in 'Payment Processing' started by Checkmait, Nov 5, 2008.

  1. #1
    I signed up with LinkPoint (they just recently changed their name) and I've so-so about them so far.

    I spoke with another credit card processor some time ago, and she explained to me that just about every processor/gateway will charge you more than the quoted discount rate for *special* cards, such as the ones that give cash back, etc.

    Has anyone heard of this? I won't be able to confirm this myself for a while.
     
    Checkmait, Nov 5, 2008 IP
  2. jestep

    jestep Prominent Member

    Messages:
    3,659
    Likes Received:
    215
    Best Answers:
    19
    Trophy Points:
    330
    #2
    This is called downgrading. The whole credit card interchange argument is basically about these types of fees.

    Your qualified rate is only good for Visa / MasterCard consumer cards. Rewards, business, corporate, and international cards have higher fees associated with them. These fees are called downgrade charges and are assessed on top of your qualified rate. For online and card-not-present you will also downgrade if you do not use AVS. These are just a few of the reasons for downgrading, there are probably 100 more.

    Every processor has them because Visa and Mastercard decide what cards have higher fees for processing. However, not all processors charge the same for downgrades. Some may charge an additional .5% while others may charge an additional 2% for the same transaction. Downgrade charges are generally what sets processors apart from each-other.
     
    jestep, Nov 5, 2008 IP
  3. Checkmait

    Checkmait Peon

    Messages:
    186
    Likes Received:
    3
    Best Answers:
    0
    Trophy Points:
    0
    #3
    *sigh*

    Does anyone know if LinkPoint or if any other company has a good reputation when it comes to downgrading?
     
    Checkmait, Nov 5, 2008 IP
  4. itsinfo

    itsinfo Peon

    Messages:
    3
    Likes Received:
    0
    Best Answers:
    0
    Trophy Points:
    1
    #4
    Payment processors often change their brand name in response to bad publicity, it happens all the time in this industry. I would double check their old name, and experiences clients have had before aggreeing to their processing.
     
    itsinfo, Jan 25, 2016 IP