Retail Merchant Accounts are for brick-and-mortar types of businesses. They are systems that allow businesses to process credit and/or debit card transactions in real time with instantaneous approvals by swiping cards across the POS Terminal.
Traditionally, Point-of-Sale Terminals similar to the one shown at the side here are used. However, some businesses use a PC Software Solution that is installed on their existing PC Computer with a plug in “card swiper” or plug-in “PIN PAD” to enable the debit option.
Retail Merchant Account Hardware & Equipment Options:
- PC Software with plug in PIN PAD
- Dial-up Point-of-Sale Terminal
- IP Point-of-Sale Terminal
- Wireless/Cellular Point-of-Sale Terminal
Retail Merchant Account Rates
Traditionally, retail credit card processing rates are the lowest rates a business can qualify for, due to the fact that most transactions will be considered “card present” which enables the business to qualify for the “Qualified” credit card rates. These rates are referred to as “Discount Rates” in the industry.
Discount rates can vary from company to company; however most Canadian Retail rates range from 1.69% – 2.5% on a Qualified rate – any higher then that and you will want to get a rate review. On “Mid-” and “Non-” Qualified rates, the rates can vary from 2.0-4% on retail merchant accounts. Again, if you are paying any higher than that, you most likely want to get a rate review on your services.
Your merchant account rates are determined by:
- Average Ticket Price per customer
- Monthly Sales Volume purchased on credit cards
The lower your average ticket price, and the higher the monthly business volume the lower, the rate you will qualify for. What many merchants want to make sure they are asking is not only what the “Qualified” rate is, but as well what the “Mid-Qualified” & “Non-Qualified” rates are.
- Qualified means card present consumer card.
- Mid-Qualified and/or Near-Qualified means any cards that have a rewards plan attached to them.
- Non-Qualified means the credit card was keyed into the POS Terminal instead of being swiped (It doesn’t qualify because the card processing company cannot verify that the card was present, making it a higher risk transaction.)
It is very important that you know your percentage breakdown and understand what ALL your different discount rates/fees will be on your credit card processing before making an agreement. This is a common kiss of death for many merchants: not verifying all their potential charges and/or not fully understanding how their individual business processing will function.
To better understand the in’s and out’s of merchant account services in Canada, we highly suggest you read our free merchant account guide.
