Bill-Back Pricing Explained
Bill-Back Pricing is a deceptive and costly merchant account pricing model. For all transactions, regardless of card type, you will be charged a flat qualified discount rate. This discount rate is what you will see listed on your monthly processing statement.
What your merchant services provider does not show you is that, in addition to the "qualified" discount rate, you are charged a bill-back surcharge fee on every transaction. This additional fee is frequently in the range of 1% to 3%.
Since Bill-Back pricing information appears on the following month’s statement, it's especially confusing because you need back-to-back monthly statements to determine your actual processing costs.
Enhanced Bill-Back is identical to the standard Bill-Back model. The only difference is your merchant services provider adds an additional markup, enhancing your fees and their profit margins in the process.
Bill-Back Pricing is difficult to identify unless you know what to look for. Typically, Bill-Back surcharge fees are listed under a section called "Interchange" where you will see something like this:
Example - Jan BB195 Trans cleared at...
Example - Jan EBB208 Trans cleared at...
The BB stands for Bill-Back and the EBB stands for Enhanced Bill-Back.
This pricing model is far from transparent and it ONLY benefits the merchant services provider. Never the business!