Effective Rates

"What is my effective rate?"

This is the best question you can ask and possibly the only thing you need to know. The effective rate is a total average rate of all the transaction fees paid to process all the sales accepted from credit cards. It may be displayed as a combined total credit card effective rate or displayed per card network (Visa, Mastercard, etc), but by law it has to be listed somewhere on your processing statement.

There are essentially two reasons why this exists. First, interchange can be a bit complex to understand. We get it, it's definitely confusing at first. The way the rate varies depending on who you are, how you accept payment and what card you're accepting payment from. We completely empathize when the response is confusion after being first introduced to the concept of interchange (cost) rates. When you ask the question “what’s my rate?” you’re expecting the answer to take the form of a single number, not a table full of them. The effective rate is the answer you’re looking for.

Second, many processors like to hide fees or advertise misleading rates. However, it doesn't matter how many different pieces the processor breaks your fees into, where they hide things or what they initially claimed - the effective rate brings everything together and tells you your true average rate. Always look for the effective rate on your statement. This is also what can be compared to flat rates such as 2.65% or 2.9% + $0.30 because, similar to flat rates, effective rates are “all-included”. Comparing a 0.90% “qualified rate” to a 2.65% flat rate is comparing apples and oranges. Learn more about the three different pricing models processors use.

Aside from the effective rate, the only other thing to pay attention to are the fixed monthly fees. Effective rates do not take into consideration fixed monthly fees. You don't have to worry about that with us though, as we don't have any monthly or annual fees (excluding equipment rental).

Your effective rate will vary slightly month to month. This is because effective rates are dependent on the cost rates of the cards you accept, but it typically doesn’t vary too much. Who you are (industry) and how you accept payments (in person vs card not present) doesn't change, so all that's left is the card types you accept.

We know the proportion/popularity of the different card networks and card types and that gives us the ability to estimate (predict) your effective rate. Click here for an instant quote online.

Every business has their own customer demographics, though. If you would like to know exactly what your effective rate would be with us, all you have to do is send us a past processing statement and we will do a complete cost analysis and penny-for-penny comparison. We'll show you exactly what you would have paid had you been our customer that month and how much you're wasting every year by overpaying on fees.

I hope you’ve found this explanation helpful, please let us know if you have any questions! We would love to hear from you and are always happy for the opportunity to explain things more clearly.