Updates to interchange rates effective Spring 2015

April 7, 2015

As a commitment to the Government of Canada, Visa® and MasterCard®announced new, reduced interchange rates to take effect April 2015. The changes include interchange rate decreases on consumer and premium cards, discounted interchange rates for charities, and new, special category pricing (MasterCard only).

VISA’s published interchange rates can be found here
MasterCard’s published interchange rates can be found here.

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Our commitment to merchants:

Moneris is pleased to explain the impacts of the interchange reductions depending on your industry and current pricing. In addition, we remain dedicated to providing transparent and clear information for the costs associated with processing payments.

For an overview of the changes and how they impact your business please review our Frequently Asked Questions.

Top 3 FAQ’s :

1) How will this new pricing adjustment affect me? What will my savings be? 

A: Impacts of pricing changes are based on a number of factors specific to each business. As always, please check your Moneris statement for specific details about rate updates.

2) When my rate changes, do I enter a new contract term with you?

A: No, the terms and conditions of your merchant agreement remain in effect. Your contract term does not change in any way as a result of this adjustment.

3) Will there be any changes to my statement? 

A: There will be no significant changes to the structure or format of your statement. There will be changes to some fee programs and card descriptors listed in the details of your statement.

What merchants can expect from us:

We will continue to work closely with Visa and MasterCard to understand and incorporate the interchange rate reductions coming into effect.

We will begin communicating rate changes to qualified merchants as early asApril 1, 2015. Please check your March 2015 Moneris statement for specific details. To assist you in understanding changes to the calculation of the Interchange Differential fee, please view the updated Interchange Rate Table.

For specific pricing updates, please monitor your monthly merchant statement accessible via Merchant Direct or contact us at 1-866-319-7450.

Key Definitions:

Merchant Discount Rate (MDR)

Is the amount a merchant is charged for processing transactions. MDR is impacted by several cost components including interchange, assessments, processing, settlement and reporting fees. This means your MDR could include Qualified Fees, Non-Qualified Fees and Interchange Differential Fees.

Interchange Rate

Is the amount that card processors – in this case, Moneris Solutions – are required to pay credit card issuers/financial institutions for each credit card transaction. Interchange rates are set and regulated by the card brands (i.e. Visa and MasterCard).

Target Qualification

Is the Interchange Rate that is expected (or ‘targeted’) to be applied to your transactions. This is what determines a qualified transaction versus a non-qualified transaction. It is typically set at the Consumer Electronic Interchange Rate for each card brand (i.e. Visa and MasterCard). Your MDR is based on the assumption that your transactions will satisfy the criteria, established by the card brands, to meet the Target Qualification Level.

Level Qualified Fee

A qualified fee is the base rate applied to all transactions. A transaction with an Interchange Rate that is equal to or below your Target Qualification Level is considered a qualified transaction. For qualified transactions, a Qualified Fee will be the only fee applied.

Non-Qualified Fee

A non-qualified fee is applied in addition to the Qualified Fee for non-qualified transactions and compensates for higher costs and risks associated with these transactions. A transaction with an Interchange Rate that is higher than your Target Qualification Level is considered a non-qualified transaction and is subject to a Qualified Fee, a Non-Qualified Fee and an Interchange Differential Fee. (Examples of non-qualified transactions are manually key entered transactions, corporate card transactions, premium card transactions and card not present transactions.)

Interchange Differential Fee

An interchange differential fee is applied in addition to the Qualified and Non-Qualified Fees for non-qualified transactions and compensates for higher costs and risks associated with these transactions. A transaction with an Interchange Rate that is higher than your Target Qualification Level is considered a non-qualified transaction and is subject to a Qualified Fee, a Non-Qualified Fee and an Interchange Differential Fee. The Interchange Differential Fee is equal to the difference between the Interchange Rate associated with your Target Qualification Level and the Interchange Rate associated with the non-qualified transaction. (Examples of non-qualified transactions are manually key entered transactions, corporate card transactions, premium card transactions and card not present transactions.)

Stay tuned to here for more news and info.

® MONERIS, PAYD, MONERIS & Design, and MONERIS SOLUTIONS & Design are registered trade-marks of Moneris Solutions Corporation. VISA is a registered trade-mark of Visa International. MASTERCARD is a registered trade-mark of MasterCard International Incorporated. All other marks or registered trade-marks are the property of their respective owners. The information in this newsletter is provided solely for informational purposes and is not intended to be legal, financial or other professional advice.

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