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CostCo Credit Card Processing | Would you like a lower rate?

Posted by Alex Neir on Wed, January 25, 2012 @ 12:47 PM
CostCo Credit Card Processing

Lowering overhead and expenses is an ongoing battle for any business. Credit card processing fees are a cost of doing business and can be reduced with a little investigation and the right questions. If you have found this post then you are already in the investigation phase. Maxx Merchants would like to offer credit card processing at a lower rate than CostCo is offering.

The CostCo credit card processing offer is extended through a company called Elavon. The advertised rates for processing are as follows.

  • Retail merchants with a small-ticket (average sale less than $15.00)
    1.37% plus $0.12 per transaction
  • Retail Merchants (Credit Card Present, Person Present)
    1.48% plus $0.20 per transaction
  • Internet and Mail Order and Telephone Order Merchant Accounts (Card Not Present)
    1.99% plus $0.27 per transaction
Additional Fees
  • $4.95 per month Statement Fee
  • $25.00 Application Fee
  • No Batch Fee

CostCo Credit Card Processing

Maxx Merchants is happy to announce the following reduced rates.

  • Retail merchants with a small-ticket (average sale less than $15.00)
    1.35% plus $0.11 per transaction
  • Retail Merchants (Credit Card Present, Person Present)
    1.45% plus $0.18 per transaction
  • Internet and Mail Order and Telephone Order Merchant Accounts (Card Not Present)
    1.95% plus $0.25 per transaction
Additional Fees
  • $4.95 per month Statement Fee
  • $0.00 Application Fee
  • No Batch Fee

*Advertised rates are for Visa/Master Card and Discover and represent the qualified rate. AMEX and rewards cards will process at a higher rate. A monthly minimum charge of $20 will apply when transition fees and per item fees are less than $20.00 for the month.  

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Tags: CostCo Credit Card Processing, Account Tuning, Credit Card Rates

CostCo Credit Card Processing | What to consider

Posted by Alex Neir on Fri, January 06, 2012 @ 03:16 PM
CostCo Credit Card

When considering credit card processing it is hard to ignore CostCo as a provider given their attractive advertised rates. It is also natural to expect savings given their brand is synonymous with savings. However, as with most things, analysis is needed to determine if the advertised savings will actually result in the best credit card processing account for your business.

Analysis needed

  • What are the rates and how do they apply
  • What does your business transactional volume look like

What are the CostCo credit card processing rates and how do they apply

CostCo credit card processing rates are advertised as:

  • 1.48% plus 20 cents per transaction for retail merchants (card present, person present transactions)
  • 1.99% plus 27 cents per transaction for mail order, telephone order and internet merchants (card not present transactions)
  • A free terminal rebate after 12 months of processing

It is important to understand that the advertised rate will only apply to transactions that meet specific criteria. For retail merchants the advertised rate will only be applied to Visa and Master Card swiped transactions for debit and non-reward credit cards. Reward credit cards are credit cards that offer a reward for use such as cash back, frequent flier miles etc. The rate will not apply for American Express or Discover. So in actuality, approximately half of your businesses transactions will downgrade to a higher rate. That higher rate is not disclosed until the application process is initiated. The typical downgrade is 1% so the advertised rate should be 1.48% – 2.48%.

What does your business transactional volume look like?

This is an important step in determining the right pricing for a merchant account. The CostCo credit card processing rates will affect the total monthly fee for the account differently depending on the volume of your transactions. For example:

If your business is internet based and the pricing is 1.99% and $0.27 a transaction

  • For a $5.00 transaction the total fee would be 7.39% of the purchase
  • For a $50.00 transaction the total fee would be 2.53% of the purchase

So if your business has a low average sale amount and a high number of transactions the $0.27 per transaction is where you need to focus. If your business has a high average ticket and a low number of transactions then you should focus more on the percentage of sale.

In conclusion it is important to understand how the rates for a credit card processing account will affect your specific business. Until you know that, it is impossible to tell if an advertised deal is actually a good fit for your company. If you would like help understanding credit card processing rates and there effect on your business please don’t hesitate to call our friendly staff as we would be pleased to help. (800)917-8026

Tags: Merchant Account Education, Credit Card Processing, CostCo Credit Card Processing

CostCo Credit Card Processing – a deal or not

Posted by Alex Neir on Thu, June 30, 2011 @ 07:12 AM
CostCo Credit Card Processing

CostCo Credit Card Processing – a deal or not

Anyone who has a CostCo membership is familiar with the value the big box wholesaler offers on all sorts of merchandise and food. But, does the value translate to credit card processing? The answer may surprise you.

First of all it is important to understand that CostCo in not providing credit card processing. They are partnered with a company called Elavon who is a subsidiary of USBancorp. It is Evalon who is setting the terms and rates for the credit card processing account. Current at the time of this blog post the advertised rates for a CostCo credit card processing account are as follows:

  • Retail Merchants: 1.48% for card-swiped transaction plus $.20 per transaction
  • Internet and Mail Order / Telephone Order Merchants: 1.99% plus $.27 per transaction

As with most credit card processing providers advertised rates the rates look great. It’s the fine print that must be read to understand the actual rates that will be charged once the account is set up. Looking at CostCo’s website for their advertised rates we see the fine print:

"Rates listed are for qualified transactions. Rewards cards process at higher rates. Monthly minimum fee amounts to $20 per month."

To the average business this can be very confusing. What difference do rewards cards have on the actual rate charged? The answer – a lot, as statistics say that rewards cards currently account for 40% to 45% of all credit cards in circulation and are on their way to 93%. Let’s investigate further by looking at an actual CostCo bill:

CostCo Credit Card Processing

Looking at the bill you will see that transactions that qualified for the advertised rate are in green and transactions that did not qualify for the advertised rate are in red. Simple analysis determined that over half the transactions on the bill were charged a rate above the advertised rate. This is not uncommon for an advertised rate. That is why it is very important to understand how the rates will be applied once the account is set up. For a detailed understanding of what to ask when shopping for a merchant account, download our report!

Tags: Merchant Account Education, Credit Card Processing, CostCo Credit Card Processing