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Learning the intricacies of credit card processing can come with some painful trial and error. There are many myths and misconceptions about credit card processing. We are here to break down some of the most common.

Flat Rate Pricing is Always the Cheapest.

Flat rate pricing looks the easiest, as you only see one rate. This has become increasingly more popular over the years. Typically, merchants are charged somewhere around 2.75%-2.9% for all swiped (including contactless) transactions, plus a per-transaction fee, ranging from 10 cents to 30 cents per transaction. There is a different rate for keyed transactions. Square, PayPal, and Stripe offer flat rate pricing. If you are a brand-new business and anticipate low monthly processing volume, or your average ticket is less than $10, flat rate pricing may be the lower cost for you.

All Processors Pad Interchange Plus Pricing.

It is true some merchant providers inflate the interchange rates. Interchange plus pricing (also known as pass-through) has the benefit of being the most transparent and most cost-effective. With interchange plus pricing, the interchange rates set by Visa, Mastercard, and Discover are passed directly to the merchant account. The plus refers to the authorization fee applied to each credit card transaction. Passing interchange fees directly to merchants with a fixed markup, surcharges and hidden costs are generally eliminated. Here at CraftPOS with our partner, Priority I.S., we use true pass-through pricing, your interchange rates are passed to you at cost.

You Can Cut Out the Middleman.

Merchant services exist for a reason. Some companies believe they will get lower processing costs if they go directly to card companies and cut out the middleman. Merchant accounts cannot go directly to Visa, Mastercard, or Discover, however if you process more than $1 million per year in American Express you can go directly to AMEX. Visa and Mastercard set interchange rates, the processor ultimately is in control of the total processing costs.

Credit Card Processing Equipment is Expensive.

Equipment for payment processing is rather affordable. Typical costs for credit card machines range from $200 to $600. When you consider the added benefit of being able to accept credit cards, a boost in sales outweighs the cost of the equipment. Most merchant service providers may offer deals for equipment or financing options to help with the cost. In the world of COVID-19, when consumers are using less cash and more plastic, having the ability to process credit cards will increase your sales and overall revenue.

Credit card processing takes away from profits.

With more consumers using cards and less cash, especially with COVID-19, the benefits of accepting credit cards dwarf processing fees. According to this article from Nerd Wallet, people spend 12%-18% more when using cards instead of cash, which easily outweighs the processing fees.

My business will experience a data breach.

It is true that every business is at risk for a potential data breach. When you accept credit card payments, you must maintain PCI-DSS Compliance to prevent fines and regulatory sanctions. PCI-DSS stands for Payment Card Industry Data Security Standard, which sets the requirements for sellers to safely and securely accept, store, process and transmit cardholder data during credit card transactions to prevent fraud and data breaches.  Here at CraftPOS we offer free PCI-DSS services from Control Scan.

Many business owners have had bad experiences with a merchant service provider. However, choosing the right provider, one you can trust with upfront pricing, fraud prevention, PCI-DSS compliance, 24/7 support, and more. In partnership with Priority I.S., CraftPOS offers the most robust merchant processing suite on the market.

CraftPOS Credit – A subsidiary of CraftPOS Inc, a point of sale company located in Ellisville, MO, specializes in beverage point of sales for breweries, brewpubs, restaurants, and retail shops. CraftPOS Credit in partnership with Priority Payment Systems, a registered ISO/MSP, processes credit card transactions for their clients.

Priority Payment Systems – Headquartered in Alpharetta, Georgia, in the heart of FinTech Country, Priority was founded in 2005. With the mission to build a merchant-inspired payments platform that would advance the goals of our small and mid-sized business partners, Priority has become one of the fastest growing payments companies in the U.S

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