Unless you have done your homework, your credit card processor starts making more money on you this Saturday morning. On the first of next month, the Durban Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 will go into effect.

In a nutshell, the law caps the fees that card networks like Visa and Mastercard can charge for debit card transactions. The intent is to benefit consumers and small businesses. However, one tiny little problem is that merchants don’t buy processing from Visa; they buy processing from "acquirers." So, on October 1st (Saturday) your acquirer's cost to process debit cards will drop like a rock, but the amount they charge you will very likely stay the same.

Since the average salon or spa does 45% of their card transactions as debit, the change is likely to be substantial.

What to do? Make sure that whomever processes your credit cards is charging you "interchange plus" pricing rather than "tiered" pricing. If your transactions are processed as "qualified", "mid-qualified" or "non-qualified" you are a great candidate to either save a lot of money or become a very profitable customer for your processor.

If you need some help figuring it out please give us a call. We will be happy to take a look at your statements and point you in the direction of a processor who will save you a lot of cash.

2 Responses...

1. Janice Van Mullem says:

   October 3, 2011 at 12:53 pm

   Wow… this is very interesting and thanks for the info and for the support. I, like many of your customers, use Millenium and the integrated processing is thru Elements Payment Service. They claim to have "True Pricing" that is the lowest available. Can you shed some light on this?
2. Seth Gardenswartz says:

   October 4, 2011 at 10:29 am

   Element does offer interchange plus pricing.