Discount
Rates
Our merchants pay Transcendent One, Inc. for the provided processing
services. These payments are in the form of “discount
rates” which are debited from the merchant’s
checking account, or Demand Deposit Account (DDA). These debits appear
on the merchant’s monthly statement. These rates are designed
to cover the fees Transcendent One, Inc. is charged for access to
interchange and other expenses incurred for handling transactions.
Discount rates are assigned as percentage points, which are also called
basis points. A basis point is one hundredth of a percentage point. The
amount of discount rate paid by the merchant on a transaction depends
on what qualification level was assigned to the transaction at
interchange.
Calculating
Discount Rates
The amount paid by the merchant to Transcendent One, Inc. for each
transaction depends on the qualification level of the transaction. The
lowest amount the merchant will pay is for a qualified transaction
(this is the merchant’s base rate). If the transaction is
partially qualified or standard, a fee or surcharge will be added to
the qualified rate.
For example:
If a merchant’s base rate is 1.85% plus .15 cents per item,
that is what the merchant will pay for every transaction that is
assigned the qualified rate. If the fee or surcharge for a
mid-qualified transaction in which the card was not swiped is .45% and
.10 cents per item, the total that the merchant will pay for the
transaction is 2.30% and .25 cents per item (This is 1.85% plus .45%
and .15 cents plus .10 cents).
If the fee or surcharge for a standard or non-qualified transaction is
1.00% and .20 cents per item, the merchant will pay 2.85% and .35 cents
per item.
On a merchant’s statement, all of the merchant’s
transactions are listed at the top of the statement and are charged the
qualified base rate. The statement calls this the merchant’s
discount fees due.
Dispute Charges
A cardholder using a credit card for a purchase has a certain amount of protection against wrongful billing, poor quality or non-receipt of merchandise, etc. The cardholder can dispute the charge and the merchant must prove it was valid. The process of disputing charges involves retrievals and chargebacks.
Retrievals
A “retrieval” is a request to the merchant through the acquirer, Transcendent One, Inc., to provide the sales slip. A sales slip can be requested for a number of reasons:
- The cardholder is questioning a sale.
- The cardholder needs a copy for tax purposes.
- The issuing bank is questioning a sale.
The merchant has a certain timeframe in which to respond to the retrieval request. If the request was in support of a disputed sale and the merchant fails to respond within the allotted time, the dispute will be resolved in favor of the cardholder, resulting in a chargeback to the merchant.
Chargebacks
A chargeback happens when the cardholder of the issuing bank disputes a charge. The funds for the disputed purchase are debited from the merchant’s account, or “charged back,” and credited to the cardholder while the dispute is resolved. The merchant must provide documentation that follows certain guidelines set up by VISA and MasterCard to prove that the charge is valid before the funds will be returned.