Did you know that there are over 700 unique categories for merchant service transactions? With so many categories, it’s hard to understand which codes would benefit your business more. This is usually left to your payment processing service provider, so if you are unaware of how merchant codes work, you might be getting a less cost-effective designation. This article explores what merchant codes and how you can get help in finding the right code.
What Are Merchant Codes:
Merchant codes are four-digit numbers that are assigned to a business by credit card companies and payment processors. These codes help categorize the type of product or service the business provides. Merchant codes also help with fraud detection by making it easier to detect fraudulent payments. If there is a service or a product that is being sold, it’s guaranteed that there is a merchant code for it.
How Do You Get a Wrong Merchant Code?
Human error is the most common reason why your business may have the wrong merchant code. There can be misunderstandings made about the products or services you provide or confusion over the nature of the business itself. It’s best to keep up to date on your merchant code by asking your provider to give you a detailed breakdown of your merchant code. There may be mistakes that happen in the application process and you wouldn’t even know about it until much later.
How To Change Your Merchant Code:
The best method for you to explore is to ask an expert such as Watchdog Management Solutions to conduct an audit of your business. Experts will be able to discover where you may be eating unexpected costs and work to get them fixed for you. As a business owner, you should not be expected to understand merchant service rates and designations, that’s what the experts are here for!
It’s worth being on top of your merchant codes due to the costs they may incur. For example, your interchange rate can be affected by your merchant code. Having the right merchant code could mean that your designations are considered lower risk and tend to have lower interchange rates. A merchant code can also determine whether or not you can charge cardholder fees, what chargeback protection you can have, and how your business may be taxed. Merchant codes are an important part of being a business, so be sure to have an expert look into them for you!