Merchant Services
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When it comes to Merchant Services, Polygon Payments makes it simple, easy to understand, and more cost-effective than the big banks. If you're looking for a reliable and efficient Merchant Services provider for your business, Polygon Payments is the way to go. We also collaborate with a number of trustworthy and specialised terminal providers to supply EFTPOS terminals, ensuring you have all the tools you need for seamless processing of Debit, Credit, payWave and EFTPOS.
Merchant Services ensure that all electronic transactions are processed securely, reducing the risk of fraud and data breaches.
Accepting a variety of payment methods, including credit and debit cards, can significantly boost sales by offering customers more flexibility.
Streamlined payment processing helps to reduce transaction times, improving customer satisfaction and operational efficiency.
Detailed transaction reports provided by Merchant Services can help businesses track sales, manage finances, and make informed decisions.
Adhering to PCI DSS (Payment Card Industry Data Security Standard) and other regulations is simplified with the right Merchant Services provider, protecting your business from potential fines and penalties.
When selecting a Merchant Services provider, understanding the different fee structures is crucial for making an informed decision that aligns with your business needs. Here are the main types of fee structures: Fixed Rate, Interchange Plus, and Unblended.
Fixed Rate pricing, also known as flat-rate pricing, involves a single, consistent fee for all transactions, regardless of the card type or transaction volume. This structure simplifies billing and makes costs predictable.
Simplicity: Easy to understand and predict.
Consistency: The same rate applies to all transactions.
Higher Costs: Can be more expensive, especially for businesses with a high volume of transactions or those that typically involve lower interchange fees.
Interchange Plus pricing, also known as cost-plus pricing, separates the interchange fee (set by card networks) from the switch fee, scheme fee and acquirer fee. Merchants pay the actual interchange fee plus a a percentage rate to cover the other costs of providing the facility.
Transparency: Clear breakdown of costs.
Potential Savings: Often lower overall costs, especially for businesses with a high volume of transactions.
Complexity: Requires understanding of interchange fees, which can vary.
Variable Costs: Monthly fees can fluctuate based on the types of cards used and transaction methods.
Unblended or Split Pricing provides a separate rate for each category of card transaction, such as debit cards, credit cards, international cards, payWave, etc. This structure can be similar to interchange plus but often includes more granular categories.
Detailed Cost Control: Specific rates for different card types can lead to cost savings.
Transparency: Clear understanding of costs associated with each card type.
Complexity: Requires tracking and understanding multiple rates.
Variable Costs: Monthly costs can vary based on the mix of card types used
Example: An unblended structure might charge 1.0% for debit payWave, 2.0% for NZ standard credit cards, and 3.5% for internationally issued cards.
Merchant fees are influenced by several factors. These factors collectively determine the cost of processing payments for a business. Here’s a detailed look at the primary elements that go into determining the merchant fee:
Card Mix refers to the types of cards used by customers for transactions, such as debit cards, credit cards, payWave and premium cards. Different cards have varying interchange fees, which are a major component of the total merchant fee.
Debit payWave Cards: Typically have lower interchange fees compared to credit cards.
Credit Cards: Standard credit cards have moderate interchange fees.
Premium/Rewards/Prepaid Cards: Often carry higher interchange fees due to the additional benefits offered to cardholders.
International Cards: Often carry the highest interchange fees due to the complexity of cross-border payments.
The Average Transaction Size impacts the effective rate of switch fees.
Small Transactions: Fixed fees can make up a significant portion of the cost, increasing the effective rate.
Large Transactions: The percentage fee becomes more significant, while the fixed fee is less impactful on the overall rate.
The Merchant Category Code (MCC) is a four-digit code assigned to a business by the credit card networks. It identifies the type of business and the nature of its products or services.
Risk Levels: Businesses categorized as high-risk (e.g., travel, gaming) often incur higher fees due to increased risk of fraud and chargebacks.
Industry Type: Some industries are subject to lower interchange rates as set by the card networks, benefiting from lower overall merchant fees.
Monthly Volume refers to the total dollar amount of transactions processed by a merchant each month.
High Volume: Businesses with higher transaction volumes may qualify for lower rates due to economies of scale and the ability to negotiate better terms with processors.
Low Volume: Smaller businesses might face higher rates as they pose a higher risk per transaction to the processor.
The Transaction Method affects the risk and cost of processing payments. The way a transaction is initiated can influence the fees.
Card-Present Transactions: In-person transactions, where the card is physically swiped, dipped, or tapped, generally have lower fees due to reduced fraud risk.
Card-Not-Present Transactions: Online or over-the-phone transactions typically have higher fees due to increased risk of fraud.
By understanding these factors, businesses can better anticipate their merchant fees and work with payment processors to negotiate terms that align with their specific needs and transaction patterns. Polygon Payments can help you navigate these complexities and find the optimal fee structure for your business.
