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Credit Card Associations "Save Money by Avoiding Downgrades"

  
  
  
  

Save Money by Avoiding Downgrades

credit card processing

Major Credit Card Associations quote the lowest Interchange rate for a transaction, assuming that a number of requirements (which vary according to the credit card type, the type of merchant account accepting the credit card payment, and the payment processing transaction channel) are met. If one or more of these requirements are not met, the transaction is categorized at a more expensive Interchange level. This is referred to as a “downgrade.”

You can prevent downgrades by avoiding the following situations that cause them:

  • You make a significant number of transactions by keypad entry rather than swiping cards through a card reader.
  • Your business model changed since setting up your merchant account, and now you offer different products and services, or provide your customers more ways to place and pay for orders.
  • You request transaction authorizations over the telephone (“voice authorization”).
  • You routinely settle transactions more than 24 hours after they are authorized.
  • Transaction authorization and settlement amounts frequently differ.
  • A significant portion of your customers pay with business, commercial or purchasing cards (credit cards issued in their business’ name), but you don’t capture Levels II and III data (detailed payment information) for these transactions.
  • You have Card-Not-Present transactions, such as payments taken over the Internet or by phone or mail.

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