Smooth and reliable payment processing is of crucial importance for every business in the retail, service, and hospitality industry. To ensure an uninterrupted payment system, every business owner should have a clear understanding of the payment service that he is using. The entire network of payment process providers can seem extremely complicated and it’s hard to get a clear grasp of what kind of services individual participants in the payment process chain actually perform.

Elly’s representatives who are in constant contact with business owners have noticed that one of the biggest pain points that merchants have is understanding the fees that are assigned to every card transaction they make. 

After some research, it has become clear why the segment concerning transaction fees is such a problem. The fees that are deducted from every transaction are often presented in a non-transparent way to make individual offers from point-of-sale system providers more appealing. 

Elly does not agree with this approach, which is why we started a mission of explaining how fees actually work. Our goal is to help every merchant understand the fixed fees that he is paying regardless of his preferred POS provider and the flexible fees he could be paying if his plan was customized to best suit his business model.

What are you paying for?

The commonly used transaction fee model is called the Interchange ++ model - or as Elly calls it - the “++ FEE” model. It represents the basic chain of three entities that play key roles in the payment transaction process: the Issuing bank, the Network or Scheme, and the Acquirer. Each of these entities performs specific transaction services and gets compensated with a cut of every transaction. 

• Issuing bank and its Interchange fee: 

These are transaction fees that must be paid to the merchant's bank whenever a customer makes a purchase from their store using a credit or debit card. Fees are paid to the issuing bank to cover processing costs, fraud, bad debt costs, and the risk of approving the payment.

These fees depend on different card levels, the country of merchant and the issuing bank, merchant segment, transaction type, and other variables.

• Network and its Network fee:

These are the fees levied by credit card companies such as Visa, Mastercard, American Express, Diners, etc. The fees for each card network or “scheme” are distinct and different from one another. The network sets the fees and updates them on a regular basis throughout the year. They include network permission fees, volume fees, cross-border fees, licensing, anti-money laundering (AML), and others.

• Acquirer and its Acquiring fee:

This segment is the only one that Elly can influence when preparing offers for its clients. Elly charges one of the lowest rates on the market. They are calculated on a monthly card volume basis. In return, merchants can benefit from multiple resources designed to help them run their business, including a Smart POS system, Smart reporting system, Quick support turnaround, Fast settlements, Fraud prevention, and more.

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How can a merchant reduce his credit card transaction fees?

Prefer POS payment transactions over CNP payments: Make sure you accept cards in person if possible to avoid higher transaction fees. Transactions processed with any of the card-not-present (CNP) methods usually have higher processing fees than POS transactions, because they entail a higher risk of fraud. 

Reduce your chargeback rate: From your bank’s point of view, frequent chargebacks represent a higher risk which may lead to higher processing fees. Make sure to use reliable measures for reducing chargebacks, like PCI Compliance.

Set up a minimum amount for credit card payments: If your average transactions have a lower amount, it would benefit you to set up a minimal amount for credit card sales. You can decide on the minimum purchase threshold for processing credit card payments, which will help you offset the processing fees. 

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One size does not fit all

Elly offers three different pricing plans, depending on different business models: Simple, Smart, or Custom plan.

• Simple plan: the Simple plan is a good choice for businesses with less than £15K average monthly volume of card transactions. It includes the so-called “Flat fee” which stays fixed regardless of the number of transactions that you are processing on a monthly basis.

• Smart plan: the Smart plan is the best choice for businesses with an average monthly volume of card transactions of £20K to £40K. The Acquiring fee varies from 0.2% to 0.5% accordingly. 

• Custom plan: businesses that process £45K+ average monthly volume of card transactions can best benefit from a custom plan, designed specifically for their business. This plan is available for businesses with large payments volume or unique business models.

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Elly offers lower fees than 90% of its competitors

According to our research on March 21st 2022, Elly is offering better pricing plans with lower fees than 90% of competitive providers on the market. 

Merchants who will opt for Elly POS will save 24% on their monthly fees in comparison to Dojo, 43% in comparison to Square, and 29% in comparison to Clover. And this is just from the pre-set pricing point of view. Elly also offers custom pricing plans to find the best possible solution for individual business models. 

If you want to know more about Elly’s prices, you can find detailed explanations on our website. We are inviting you to send us your current offer, so we can prepare you a better one.

This is how we help your business grow. Start paying less today!