Sage 100 Payment Processing Tiered Pricing Has Many Traps

Sage 100 Payment Processing Tiered Pricing Sounds Good at First but the Math Doesn't Add Up

There are all sorts of different pricing models when it comes to Sage 100 credit card processing with countless new and confusing offers. When you really start to do the math on these offers using your processing history, you may start to see that some things don't add up. Tiered pricing is a prime example of this issue. It's full of traps you won't see coming if you're considering switching your Sage 100 payment processing.

Tiered Pricing Savings Should be Verified

Each transaction with tiered pricing is grouped into one of the payment processor's tiers and each tier has a set fee amount. The payment processor determines which transactions go into which tiers, and it often bases this on a transaction's interchange fees, which are included in the rate.

Each bucket’s pricing consists of a specified percentage based on the sale amount, a fixed transaction fee, and typically a monthly fee to the processing provider.

What's often not apparent immediately is that a tiered pricing model is actually the most expensive of the four, industry-standard pricing models. It’s an oversimplified bucket system. Qualified, Mid-Qualified, Non-Qualified, Business and International are the five buckets or tiers. At first, the rates often look great. When you lose the granularity and reduce pricing to simply debit card, rewards card, business card, or a corporate purchasing card, you lose out on ways to save when the card is present compared to an online sale with a more inherent risk of chargebacks.

An Example of a Tiered-Pricing Trap

You've probably seen this one before and maybe have been the victim of it. It's the tier structure based on some nebulous determination that the transaction is qualified, mid-qualified, and non-qualified. Rates are lowest when transactions are deemed qualified but what is considered "qualified" can differ from one processor to another.

And again, the three tiers are so broad, you'll soon end up paying more for transactions that are deemed mid- or non-qualified by the processor and you'll have no say in the matter. It's important to understand the types of payments (online or in-person), payment cards (corporate, rewards, business), and other requirements needed to qualify for transactions. A big one to watch out for is a plan that is only qualified if transactions are swiped. If your business is entirely online and always keyed, this plan will never save you money.

Interchange Plus Pricing is Ideal

Ideally, the interchange pricing approach is your safest option if you're concerned about keeping fees down. What you'll usually see with Interchange Plus pricing plans is a simple markup on top of what the payment network costs. The Interchange Plus pricing model is affordable for all kinds of business types and it has the most transparent fee structure. You'll easily see and be able to calculate what you'll pay the card network and to your credit card processor.

Start Saving with Help from Paya's Integrated Payment Experts

Paya is the leader in delivering more straightforward, efficient, and deeply integrated payment solutions with over 25 years of industry experience and 2,000+ industry customers and partners. Paya is committed to delivering best-in-class integrated payment solutions across the full suite of Sage ERP products. We are proud to be Sage’s preferred partner for Integrated Payments in the US.   

At Paya we are unique from our competitors because we emphasize solutions engineering, engaging our domain experts as part of the early sales process. Through a collaborative but simple hands-on process, we develop a deep understanding of our partners’ current processes and pain points and requirements to ensure you get a platform and system with the capabilities you need. Paya has enabled businesses to optimize billing and invoice processes, deliver more payment options and greater flexibility to their customers, and improve back-office efficiencies.

Contact Paya's Acumatica Integrated Payments team to schedule a free consultation today! 

Learn more about how our credit card processing experts, solutions, and processes can benefit your organization and save you money!! 

See Paya's Acumatica Integrated Payments solution on ERPVAR's site.