What is Cost+ Pricing?
Cost+ pricing (also known as interchange+ pricing) is a billing method used by Helcim to give you further transparency and savings. When you process a transaction, we pass the interchange cost directly on to you. At the end of the month, we charge you a set rate (such as 0.18%) on your total processed volume.
For example, if a transaction had an interchange and card-brand fee total cost of 1.70%, you would be billed 1.70% for the transaction and 0.18% for Helcim's service. Your total cost on that transaction would equal 1.88%.
Why is Cost+ Better?
Savings and transparency! Many processors use "tiered" pricing, where you are charged a base "qualified" rate and then charged a "non-qualified" fee for most transactions. This results in rates that are much higher than needed.
By passing the cost directly to you and only charging for a single markup, Cost+ pricing gives you significant savings while creating a very transparent arrangement with your processor (you know our cost and margin!)
Credit Card Processing Pricing Comparison
Confused about the various ways that processors charge for their fees? Below is a breakdown of the most common credit card processor rates, and how they compare to our Cost+ pricing.
Understanding the Interchange Cost
Interchange fees are set by Visa and MasterCard and paid to the customer's bank (issuing bank). This is the orange in the charts. These will vary depending on the type of credit card (consumer vs. premium) and how it is entered (card-present vs. manually keyed).
Processors and merchants of all sizes are bound by the same Interchange. As you go through the various pricing methods below, pay attention to the blue, this is the processor's profit margin. Notice how it changes between the various pricing methods.
Interchange Plus pricing (or as we call it, Cost+ Pricing) is still uncommon, as it has the lowest margins for a processor. The processor passes the true Visa and MasterCard costs on to the merchant, and charges a single markup (%) on top of the processing volume.
We offer all of our merchants Interchange+ Pricing as it creates a very transparent arrangement between us and our clients.
Flat Discount Rate
Flat pricing typically has a flat percentage and a per transaction fee, regardless of the types of credit cards used or how they are entered. Only a few major online processors use this pricing method, such as PayPal's online and virtual terminal packages.
Tiered pricing usually consists of having a lower "qualified" rate for certain transactions and higher "mid" and "non-qualified" rates for others. This is the most common pricing method in the US. The common drawback is that merchants are enticed with a low "qualified" rate, but nearly all transactions end up in the higher mid and non-qualified tiers.
While less common in the US, Interchange Differential is the default for almost all Canadian processors including Moneris and TD.
Similar to tiered pricing, "qualified" and "non-qualified" fees are charged, but merchants are also charged "interchange differential fees" for credit cards. This results in merchants paying multiple fees on the same transaction, essentially being double billed.