Who’s Paying for those Credit Card Rewards?

Free airline miles? That sounds great.
2% cash back every time I pay with my credit card? Sign me up.
These perks are why I use credit cards for both business and personal use and countless others do as well.
We see the commercials from celebrities promoting these incentives if we pay with credit cards at businesses. It sounds great, because for a consumer, it is an easier way to pay and to make a return on your payment with merchants.

So who’s really paying for those credit card rewards cards?
It’s you, the business owner.

No matter who your credit card processor is, you will always pay more for a rewards card than a standard credit or debit card.
These are the Interchange rates set by the Card Issuers and Card Brands. And your business has no control over what types of cards your customers pay you with. The next ten payments you accept might be from debit cards or rewards cards, but you can’t turn away business.

It is important for you to understand that these cards will always cost your business more than standard credit and debit cards. How much more depends on the credit card processing provider you partner with.

Find a credit card processor that educates you on Interchange, how it applies to your business, and how you can best manage these rates.

About

Vice President of True Merchant.
Really Nice Guy.