Dharma Merchant Services offers two pricing models that will benefit our merchants based on the
type of processing environment, industry type, business history, level of risk, monthly volume,
average ticket, and merchant creditworthiness. Both of these programs are very
fairly priced with the industry standards. Dharma Merchant Services feels a deep
responsibility in explaining these models as a way to educate merchants on this very complex
and confusing cost structure of accepting card payments. It is highly unlikely that
you will find this information on other providers’ websites.
Interchange Pass Through
This program refers to the buy rates (Interchange) to which all Merchant Service Providers (MSP’s)
are subject by the Card Associations – Visa and MasterCard. The buy rates are set for each
type of credit card. In the credit card acquiring industry, there is no pricing advantage given to even the largest of providers, which allows
Dharma Merchant Services to have parity in the market. With this model, there is a small
constant margin added to each category of card type – like check cards, regular credit cards, cards
with rewards programs, business-issued cards, etc. For example, if a particular card type
has an Interchange rate of 1.70% (inclusive of dues and assessments by Visa/MC), and the merchant
is operating in a retail environment, Dharma MS would charge 1.90% - or 20 basis points over cost.
There is also a transaction fee that applies – also depending upon the environment –
card present or card-not-present. In this model, there could be dozens of categories
represented on a merchant’s monthly bankcard statement.
Tiered Pricing Program
This program is based on aggregating all the many card types into just a few categories – typically
referred to as qualified, mid-qualified, and non-qualified rates. This has been the
prevalent pricing manner for most MSP’s in our industry, but has also been the source of the most
deceptive and abused practices. For example, it is quite common to find a qualified
rate for ecommerce (card-not-present) merchants of 1.99%, but that would only include debit card
and non reward credit card sales, which could be only a very small percentage of a merchant’s overall
business. The non-qualified rate is often 4% or higher!
This is how merchants can get lulled into long term contracts with hefty fees for
early termination when they find out they’ve been taken by this “we give great rate” line.
Dharma Merchant Services does offer a tiered pricing program for merchants that are just starting
out with an ecommerce site, or who prefer the simplicity of a tiered program, or who otherwise
may not qualify for an Interchange pass through program. The rates are set at 2.19% for
qualified, 2.69% for mid qualified (mostly rewards cards), and 3.19% for non qualified cards.
Very fair.
Both of our programs have other common costs – like a monthly statement fee, per transaction fees,
charge-back fees, NSF fees when applicable, etc. What we do not charge are any annual fees,
application fees, or early termination/cancellation fees! We believe that a merchant should
not be punished with having to pay a fee just to be released from a processing contract if they
happen to go out of business or wish to switch to another provider. We can confidently
say that our attrition rate is almost nil due to our exemplary pricing and service.