Swiped vs. Keyed Transactions: What’s The Difference?
Almost any merchant who accepts credit cards can tell you that it was a great move towards expanding their business as it is a well-known fact that accepting credit cards can increase sales, which will increase revenue. Now, credit card processing may not be cheap in some cases and definitely it is not a free service. Merchants always seek the cheapest way to process payments but realizing some of the basic steps they can take in order to save money on processing fees. One of the easiest ways to prevent merchant service providers from increasing processing fees is by swiping a card when possible, as opposed to manually keying the credit card numbers.
So Why Keyed Transactions Increase Costs?
Credit card interchange fees, set up by the credit card networks, vary and are based on the risk factor of the transaction. Logically, a swiped transaction is the safest, or the lowest risk incurred, due to the fact that the customer is present with the credit card in hand which could be swiped. On the other hand, a manually entered transaction is considered the riskiest due to the fact that neither the card holder nor the credit card is physically present at the time of sale. Now, simply because the risk level increases, so it the interchange.
If you are set up with a tiered rate merchant account, this higher rate will be called the Non-Qualified rate. On the other hand, if you are set up with an interchange pass through account, you might see an increase in the interchange for this transaction on your monthly statement.
How to Cut Down Payment Processing Fees and How Accepting Credit Cards on iPhone, Android or iPad Could Help.
Who does not want to save money when possible? I mean, every business owner looks for ways to cut down costs and processing costs are a good factor to do so. Mobile payments offer a great way for merchants to cut costs. For example, if you are a handy man most likely you perform a job, then you write down the credit card numbers of your clients and finally return to your office and punch in the numbers at your traditional credit card terminal. Those days are over now, by using mobile payments you’ll be able to swipe the credit card at the customer location using your smartphone or tablet. That way you will save money on processing fees, save time and hassle to write down the credit card number, make the process much more secure (as the paper with the credit card details can accidentally reach the wrong hands) and, above all, make sure that the credit card goes through and get approved on the spot!