Understanding and Minimizing Card Fees for all Parties
While credit cards are popular payment methods that many travel companies rely on, particularly when companies focus on a shift to digital payment methods, the merchant and bank fees that accompany them are complex and can quickly eat away at a company’s revenue. During this unprecedented time in our economy, streamlining operations and reducing such costs should be mission-critical to maintaining the financial health of timeshare businesses.
As you set up and plan for payment processing costs, keep in mind the various types of card fees your timeshare business may be incurring:
Type of fee
How is it calculated?
Who collects it?
Who pays it?
Interchange fee
Determined based on the location of the cardholder and the location of your business.
Card issuers
Merchant
Scheme fees, card acquirer fees, and margin
Charged on an interchange, plus margin, plus scheme fees basis. The margin is generally determined based on volume, average transaction value, and potentially the merchant's risk profile.
Card networks (like MasterCard and Visa)
Networks charge acquirers, who pass these fees onto the merchant.
Payment gateway fees
A payment gateway is a route into an acquiring platform. Gateways authorize and perform fraud checks before authorizing and enabling access to alternate payment methods like PayPal, Venmo, and AliPay. Most gateways also securely store your guests' card numbers and perform tokenization services. They charge fees for all of these services.
Gateways
Note: Alternative payment methods may also charge you fees depending on your gateway's cost structure
Merchant
Payment Gateway Fees: Do you Know What Fees You are Paying your Gateway Provider?
