For Missouri businesses, better fee disclosure means better business
Many business members of Associated Industries of Missouri rely upon secure credit card transactions as an integral part of everyday business transactions. But business owners may not know upfront what fees are charged. MasterCard plans to provide more transparency in the process and we support that transparency.
Today, electronic transactions are the norm and are good for businesses of all sizes. The technology that makes these transactions possible uses a network to process and transmit payments. Businesses receive the payment from the cardholder’s bank immediately and the fraud protection embedded in the technology makes sure the transactions are secure.
However, understanding payment processing fees and negotiating rates can be daunting, especially for small to mid-sized businesses. Confusion regarding fees and rates causes problems and can be eliminated through better education of the business regarding the fees. The key is to understand the exact fees that are charged and how they are structured so the business may compare rates of different payment processing companies and negotiate the best deal.
MasterCard is about to require all processors who access their electronic payment network to provide their business customers with a clear and detailed disclosure of each fee and how it is calculated. Small business owners will be able to see their base wholesale cost for using the electronic payment network, better known as the “merchant discount rate,” and how it is calculated so that business owners better understand their rates and fees upfront.
Payment processors will also be required to provide business owners with at least 30 days advance notice before increasing or introducing any new fees related to MasterCard accounts or transactions.
This is important for the business community and will help merchants control costs and negotiate for better deals.
We hear the word “transparency” constantly in the business and political arenas. MasterCard is leading the way to make the costs and benefits associated with electronic payments transparent in a real and meaningful way.