Card network fall updates for merchants: Card processing fees

The landscape of credit card processing is ever-evolving. This fall, businesses must be prepared to adapt to new card network fee regulations. In this article, we will delve into the changes merchants might need to address and provide insights into the actions required for compliance.

What action do merchants have to take?

In the coming months, merchants may find themselves needing to take proactive measures to accommodate Fall 2023 card network fee adjustments. These modifications could entail the implementation of new integrations designed to ensure compliance, such as EMV 3DS. For instance, the adoption of effective tokenization methods for card authorization can play a pivotal role in helping merchants avoid incurring the new SCF fee, which amounts to 2.5 basis points (0.025%) per transaction.

Not all merchants will be equally affected by these card network updates, and their applicability may vary depending on geographical regions and specific business operations.

Monitoring and reducing merchant fees

Interchange rates are unavoidable, but choosing the right merchant services fee structure can reduce them. Here is what you need to know:

• Interchange Plus: As well as charging a percentage of the total transaction, which is set by the credit card network, merchant service providers also charge processing fees. This will also be a percentage of the total transaction amount, plus a small additional charge of approximately $0.10.
• Tiered processing fees: Under a tiered fee structure, merchants pay different fees depending on the transaction type. Qualified discount transactions, which include debit cards, non-reward based credit cards, and physical chip and pin or swipe transactions, have the lowest interchange fees.
• Third-party processors: Payment processors charge a flat fee per transaction and may also charge a monthly subscription fee. PayPal flat-rate merchant fees vary depending on the region, payment type, and currency.

Preparing for future updates

In pursuit of card network compliance, enterprise merchants must remain vigilant in their commitment to adhering to the dynamic landscape of card network rules and regulations. This unwavering commitment not only guarantees steadfast compliance but also safeguards invaluable customer payment data.

PayPal Braintree is one of the world’s biggest network tokenization service providers, protecting billions of payment credentials around the world each year and helping enterprises keep authorization rates high while delivering a seamless customer experience.

Learn more about Fall 2023 Network Updates.