Competitor Pricing Strategies – Pricing Flexibility for Card Present and Card Not Present Transactions
First Data says competitors may begin to price Card Present and Card-Not-Present transactions differently in the coming months.
For example, under tiered pricing, competitors may use a unique set of tiered fees for card present and card-not-present transactions. The examples in the chart below may be a method used by competitors moving forward:
| Tier | Acceptance Method | Volume Fees | Item Fees |
| Qualified | Card Present | 1.75% | $0.15 |
| Card-Not-Present | 2.25% | $0.15 | |
|
Mid-Qualified
|
Card Present | 2.25% | $0.15 |
| Card-Not-Present | 2.75% | $0.15 | |
|
Non-Qualified |
Card Present | 2.99% | $0.15 |
| Card-Not-Present | 3.49% | $0.15 |
Previously in most tiered pricing, rates for each tier can be different depending on whether the card type was Credit or Debit. With the introduction of this capability, the client may experience two rates for credit and two rates for debit for each tier.
While the introduction of this pricing method creates another layer of pricing element, there are advantages for Indigo. We will be able to apply industry averages more accurately since keyed volume will specifically be disclosed under this pricing. And we can adjust the keyed volume during the pricing analysis to more accurately assess the savings/margin available on the account.
According to the documents released, Card Present and Card-Not-Present transaction qualifications are as follows:
Card-Present Transaction Methods Include:
– Traditional countertop credit card machines
– POS Systems with card readers
– Contactless-enabled terminals
– Card readers connected to smartphones or tablets
Card-Not-Present Transaction Methods Include:
– Online shopping carts
– “Buy” buttons on websites
– Recurring or subscription billing
– Electronic invoicing
– Orders taken over the phone and manually entered
– Payment apps on smartphones or tablets that don’t use a card reader
The pricing team will provide updates with industry usage of this pricing practice. Please contact statements@indigopayments.com with questions.
