Card processing, in plain words.
Search the terms that appear on statements, contracts and sales calls. Short definitions, no jargon used to define jargon.
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How to use this glossary
Type any term into the search box. Definitions are written for owners and managers, with notes on why each term affects what you pay.
Most important term
If you remember only one, make it effective rate: total fees divided by total card volume. It cuts through every pricing model.
Processing terms, explained
- Effective rate
- Total processing fees divided by total card volume for the same period. The single most honest measure of what accepting cards costs you.
- Interchange
- The fee paid to the cardholder’s issuing bank on each transaction, set by card networks. It varies by card type, entry method and merchant category, and passes through every processor.
- Assessments
- Fees charged by card networks such as Visa and Mastercard on transaction volume. Like interchange, they are pass-through costs rather than processor markup.
- Markup
- The processor’s own margin on top of interchange and assessments. This is the part that varies between providers and is open to negotiation.
- Interchange-plus
- A pricing model that passes interchange and assessments through at cost and adds a disclosed markup. The easiest model to audit line by line.
- Tiered pricing
- A model that sorts transactions into qualified, mid-qualified and non-qualified rate buckets. The bucket rules are set by the processor and can hide costs.
- Flat-rate pricing
- One percentage and per-transaction fee for most cards. Simple and predictable, often more expensive at higher volumes.
- Dual pricing
- Displaying both a cash price and a card price for each item, so customers see the difference before choosing how to pay.
- Cash discount
- A program where the posted price includes card acceptance costs and customers paying with cash receive a disclosed discount.
- Surcharge
- A disclosed fee added to credit card transactions to offset acceptance cost. Generally not allowed on debit or prepaid cards, capped by network rules and regulated by some states.
- FeeShift
- PrimeSwipe’s review-led program for evaluating whether card costs can be shifted through a disclosed pricing model or reduced with better traditional pricing.
- Card-present
- A transaction where the physical card is tapped, dipped or swiped. Usually carries lower interchange than card-not-present payments.
- Card-not-present
- Online, phone, invoice or keyed transactions where the card is not physically present. Typically higher risk and higher cost.
- Keyed transaction
- A payment entered by typing the card number. Often downgrades to a more expensive interchange category.
- Downgrade
- When a transaction fails to meet requirements for its best interchange rate, for example due to late settlement or missing data, and is charged a higher rate.
- Batch settlement
- Closing out the day’s authorized transactions so they are submitted for funding. Settling daily helps avoid downgrades.
- Chargeback
- A disputed transaction reversed by the cardholder’s bank. Usually comes with a fee and a deadline to respond with evidence.
- PCI DSS
- The Payment Card Industry Data Security Standard. Merchants validate compliance annually, often with a questionnaire; missing it can trigger monthly non-compliance fees.
- Level 2 and Level 3 data
- Additional transaction details such as tax amount or line items, which can qualify eligible business and purchasing cards for lower interchange.
- Acquirer
- The bank or institution that holds the merchant account and settles card transactions into your bank account.
- Issuer
- The bank that issued the customer’s card and receives interchange.
- Monthly minimum
- A fee charged when your processing fees for the month fall below a set amount. Common in seasonal businesses.
- Early termination fee
- A fee for ending a processing agreement before its term. Always ask for it in writing before signing.
- Equipment lease
- A long-term rental contract for terminals that can cost far more than buying the hardware outright and may be non-cancellable.
- Funding time
- How long it takes for settled card sales to reach your bank account, typically one to two business days depending on cutoff times.
Frequently asked questions
What does PrimeSwipe help my business do?
PrimeSwipe helps merchants evaluate card-processing costs and choose between traditional pricing and eligible FeeShift programs. Start with a no-obligation savings review; the right recommendation depends on your business, payment mix, location and current agreement.
Can I really eliminate every processing expense?
Not necessarily. Eligible pricing programs can offset some processing costs, but equipment, software, monthly fees, debit acceptance and other charges may remain. Ask for a written total-cost comparison rather than relying on a headline rate.
What do I need to request a savings review?
Your name and email are enough to start. Business details and processing volume are optional. A specialist may later request a recent statement through an appropriate secure channel. Do not send card numbers, bank credentials or Social Security numbers through this website.
Is requesting a review a merchant-account application?
No. This short inquiry does not open an account or commit you to a contract. Underwriting, documentation, equipment compatibility and final pricing are reviewed separately before you decide.
Do I need to replace my current terminal?
That depends on the terminal, software and processor. Include your existing setup when you speak with a specialist. Confirm integration, hardware, training and cancellation costs before switching.
Will the savings calculator give me a binding quote?
No. It illustrates the processing expense implied by the volume and effective rate you enter. Actual savings depend on eligibility, residual fees and the plan selected. Only a written proposal can establish your costs.