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2 Reasons Tiered Pricing for Sage 100 Payment Processing is Not Ideal

tiered pricing for Sage 100 payment processingWhat's the Alternative to Tiered Pricing for Sage 100 Payment Processing?

Tiered pricing is an attractive concept if you’re considering switching your Sage 100 payment processing. It’s easy to calculate, there are usually only five buckets or tiers; Qualified, Mid-Qualified, Non-Qualified, Business and International. The rates often look great, at first. Sadly, what often happens is that by the second or third month of processing, companies don’t realize the savings they were promised, and may even be paying more. Here are some common traps to watch out for and what to do to avoid them.

The Tiers Need to Match Your Needs

In the tiered model, each transaction is grouped into one of the payment processor's tiers, and each tier has a set fee amount. The payment processor determines which transactions go into which tiers, and it often bases this on a transaction's interchange fees, which are included in the rate.

The rate you’re charged for each transaction consists of a specified percentage based on the sale amount, a fixed transaction fee, and typically a monthly fee to the processing provider. Where this becomes a trap is the definition of how the transactions are bucketed in each tier so your transaction ideally qualifies consistently for the lowest tier.

Often, companies come to find out that a tiered pricing model is actually the costliest of the payment processing pricing models. It’s a grouping system, which usually means you have no control over how your transaction is classified, and have no way to dispute it if you don’t qualify for the lowest rate.  More importantly, you’ll never see savings if the majority of your transactions are not eligible for the lowest tier. For example, if all your transactions are keyed, and that’s what qualifies for the best rates, you’re already at a deficit.

Interchange Plus Pricing is Ideal

What you'll usually see with Interchange Plus pricing plans is a simple markup on top of what the payment network costs. For example, VIP Integrated Payments will charge you exactly what the payment network (Visa/Mastercard) charges on the transaction (known as Interchange), plus their markup, and a flat monthly fee. You’ll see a breakdown of the fees passed through to you as well as the portion you pay to VIP, which you typically won’t get from a processor offering tiered pricing.

As well, the Interchange Plus pricing model and the transparency it requires makes it difficult or impossible for your processor to arbitrarily raise your fees. For example, even though Mastercard and Visa announced that Interchange increases for online purchases will be delayed until April 2022 while the economy recovers, if you’re on tiered pricing credit card processing, there is nothing that prevents your processor from raising the rate of a tier, regardless of what Interchange fees actually are.

Seek an Experienced Sage 100 Payment Processing Provider

Our VIP credit card processing solutions integrate seamlessly with your Sage 100 and most other ERP/accounting systems, allowing you to accept credit card payments easily right inside your software. The integration automatically posts payments to invoices, so there’s no need to go back into your Sage 100 at the end of the day to reconcile your invoices or balance your general ledger, saving you hours of headaches.

VIP is a Sage 100 Payments Provider with solutions that integrate seamlessly with your ERP/accounting system, allowing you to securely accept credit card payments inside your software. The integration automatically posts payments to invoices, so there’s no need to go back into your program at the end of the day to reconcile your invoices or balance your general ledger. How much time could that save you every day?

The experts at VIP Integrated Payments (VIP) have seen it all. If you are confused by a merchant offer, contact VIP to help walk you through it and explain those provisions with no obligation. We strive to remain processor agnostic to help save customers from long-term contracts and nasty terms. We'll help you find the solution that fits your needs. If they're not doing their job right, you have the right to move wherever you want and that's the way that it should be.

Contact our experts at VIP today to start saving time and money with Level 3, ERP-integrated credit card payments. Give us a call at (888) 791-9390 ext. 101 or visit or email us.