Visa® and MasterCard® have strict timelines for settling transactions through their systems. In most cases, transactions need to clear through the card companies within two days, excluding Sundays and major holidays, to qualify for the most favorable interchange rates. All payments processors have only two days to process your transactions and forward them to Visa and MasterCard.
Batching even one day late can significantly increase the interchange rate. Transactions that don’t meet the two-day time period are “downgraded” to a higher rate — which means you actually pay more for them. If you settle your accounts only one day late, it costs you as much as 0.76% more per retail transaction for Visa transactions and 0.31% more for MasterCard transactions. As more time passes, the fees get even higher — as much as 1.16% more for Visa and 1.12% more for MasterCard.
Most issuing banks drop the holds based on the authorized amounts from cardholders’ accounts after seven days. If the hold is dropped on the seventh day, and the sale comes in on the tenth day, the customer may experience an overdraft. As recourse, a customer may request a refund of the overdraft charges as well as a letter to clear his/her name. Worse yet, the cardholder may decide to no longer patronize your business.
Also, the longer you wait to download transaction information, the longer it takes to show up on a customer’s billing statement. After some time, the customer can dispute the charge and request a refund — which comes in the form of a chargeback to your business.
Consider batching your transactions on a timely basis. If all other qualifying criteria are met, you qualify for the best interchange rates by settling your transactions daily. Plus, you avoid paying any fines to Visa and MasterCard — putting that money back in your business where it belongs.
These and other money saving tips are for the merchant! The money you save goes directly to your bottom line.
This tip and more are for your information:
Naples Merchant Services
Naples Florida
239-449-6040
http://www.naplesmerchantservices.com/
Please take time to read our free online tips to save you time, money, and run your business much more efficiently.
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