Increasing popularity of pass through cbd pricing formats has caused confusion with a common industry term that is making it tougher to compare cbd quotes. If you’re like most people, you compare cbd s by asking prospective providers for their rates and fees. Until recently this approach worked just fine. But the increasing number of providers that are offering interchange plus pricing has made this question tougher to answer.
And the reason lies in how charges are determined on different pricing formats. The term merchant discount refers to the final rate that a business pays to process credit card transactions. The greatest contributors to merchant discount are interchange, dues and assessments and the merchant service provider’s markup. Of these three major components, only the merchant service provider’s markup is negotiable. In rare cases, some providers have been known to apply a small markup to assessments, but for the most part Interchange, dues and assessments will remain consistent between providers. The two most commonly used pricing formats are tiered and interchange plus, and both formats use interchange rates to determine the final merchant discount rate.
The confusion arises from how the two types of pricing are typically quoted. Providers quote tiered pricing using the merchant discount rate whereas only the markup component of merchant discount is quoted with interchange plus. The generalization of interchange categories on a tiered pricing format into qualified, midqualified and nonqualified buckets makes it impossible to differentiate interchange charges from the provider’s markup. Therefore, providers that utilize tiered pricing have no choice but to offer quotes based on merchant discount which includes interchange, dues and assessments and their markup. An example of a tiered quote for a retail business looks something like .
plus just cbd gummies 750mg dosage with greater mid and nonqualified tiers. In contrast, the interchange plus pricing format passes interchange, dues and assessments directly to merchants. Since the provider’s markup is separate from the other components of merchant discount, and remains consistent regardless of the interchange category to which a transaction qualifies, providers are able to offer quotes by disclosing only their markup. An example of an interchange plus price quote would be something like basis points .