With 30% of chargebacks coming from fraudulent card use, operators often are left with additional fees, estimated to be around 1.47% of total revenue. By using AVS (address verification system) and CVV (credit verification value) tools; operators can verify that the card on offer is legitimate. AVS works through a third-party service and incurs a small cost. The AVS system checks to see if the billing address of the customer matches the address on file with the credit card issuing bank. CVV is the three to four digit number found on the back of cards, including Visa and MasterCard. By asking for the CVV number, mandatory in Canada since 2018, the operator ensures the card is actually on hand when the purchase is being made.
Physically keyed-in transactions have the highest processing rates. The suggestion here is that if a customer’s card does not swipe, ask for another card or form of payment.
When businesses take their time to settle transactions, they often get downgraded, with interchange fees rising by as much as 0.5%.
Debit transactions are charged a single transaction rate–regardless of the value of the purchase. Merchants, such as gas station operators, pay under 10 cents to process each debit transaction (some fees can be as high as 40 cents). This fee does not change regardless of the size of the purchase.