A Cross Border Fee for Credit Card Processing is a fee that some credit card processors charge to merchants who are accepting international transactions with cards issued outside of the United States. These fees can range from 2.5% up to 10% or more and they must be paid regardless of whether the transaction was pre-qualified before it's declined (meaning the card is good). Cross Border Fees for Credit Card Processing are charged in addition to interchange fees.
When Should Cross Border Fee for Credit Card Processing Be Charged?
Cross border credit card processing fee must be paid anytime a business based in the United States accepts a credit or debit card issued by a bank outside of the country. This means Cross Border Fee for Credit Card Processing must be paid when a merchant processes a transaction with a foreign issued credit card (where the customer is located outside of the U.S.) or processing an online purchase with an international shipping address.
Cross Border Fee for Credit Card Processing may also apply to merchants who accept cards issued by another country's version of USA's FDIC banks (i.e., Cross Border Fee for Credit Card Processing may apply when an American business accepts cards issued in Canada, Mexico or the Caribbean).
Where Do Cross Border Fees for Credit Card Processing Come From?
Cross Border Fee for Credit Card Processing are fees that are charged by credit card processing companies who are not willing to assume the additional risk of Cross Border transaction. Cross Border Fee for Credit Card Processing is a fee that credit card processors charge when they process Cross Border transactions from countries outside the United States when the bank issuing the card is not located in the United States. It's considered a higher-risk payment option and therefore carries a higher cost for merchants accepting these Cross Border transactions. Cross Border Fee for Credit Card Processing is the additional fee that must be paid to cover this risk.
Why Would Cross Border Fees for Credit Card Processing Be Charged?
Cross Border fees are charged because Cross Border transaction have a higher risk of chargebacks/fraud than domestic transactions. Cross-border cards are issued by banks outside of the U.S., making Cross Border Fee for Credit Card Processing a fee that is charged by credit card processors because they assume additional risk when Cross Border transactions are processed. Cross border cards have a higher default rate and Cross Border Fee for Credit Card Processing covers this increased risk.
How Do Merchant Account Providers Collect Cross Border Fee for Credit Card Processing?
Merchant account providers collect Cross Border Fee for Credit Card Processing in one of two ways:
- Cross Border Fee is a flat fee collected with each Cross Border transaction
- Cross Border Fee is a percentage of the total Cross Border transaction amount (varies from 2.5% to 5%)
Can Cross Border Fee for Credit Card Processing Be Negotiated?
Some Cross Border Fees for Credit Card Processing can be negotiated. Shopping around and comparing Cross Border processing quotes is the best way to find Cross Border fee rates that are lower than what your current provider may charge for Cross-border transactions. Before you switch providers, however, ensure you understand exactly what Cross Border Fee for Credit Card Processing includes. Cross Border processing fees do not include Cross-border interchange fees, which are set by the credit card associations and must be paid regardless of which processor is used to process Cross-border transactions.
What Are The Tactics Merchants Can Use To Reduce Cross Border Fee For Credit Card Processing?
The Cross Border Fee for Credit Card Processing will vary depending upon the Cross Border processing company you are using. Cross Border Fee for Credit Card Processing can be negotiated to some degree, although not all Cross Border processing fees are negotiable. Some companies have no Cross-border interchange rates but charge higher Cross Border Fee for Credit Card Processing while others have Cross-border processing rates that are comparable to (or even cheaper than) their domestic rates, but charge Cross Border Fee for Credit Card Processing.