It seems easy enough, but as I’m about to explain, it’s not quite that simple. This leads us to believe that those transactions should be charged a fee of 1.22% plus $0.12. For example, this screen grab from Costco’s website shows a qualified rate of 1.22% plus $0.12 for on site and in-store transactions. Tiered pricing is always quoted as a percentage and a flat transaction fee, and the qualified rate is typically a little greater than the lowest credit interchange fee. For now, check out this screenshot taken from Costco’s website and I’ll show you how to spot tiered pricing. I’ll explain exactly how processors game the system with tiered pricing in just a moment. By doing so, they’re able to mask the true cost of processing while increasing profits. On a tiered pricing scheme a processor (in this case Costco’s partner Elavon) groups interchange fees into several tiers called qualified, mid-qualified and non-qualified. You can get a full review of Costco’s processing services in our Costco credit card processing review.Ĭostco’s merchant accounts use tiered pricing. Note: this article focuses only on Costco’s merchant services rates and fees. Here’s a breakdown of why Costco credit card processing services are so horrible. In short, you will pay through the nose to process credit cards, and you’ll likely be stuck doing it until your multi-year contract expires. Instead, they outsource merchant services to a company called Elavon.Ĭostco’s merchant accounts use tiered pricing with bait and switch rates. In fact, Costco doesn’t even provide credit card processing. Costco may sell some things at wholesale prices, but it’s not merchant accounts.
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