Accepting credit card payments comes at a price for businesses, no matter their size or who they serve. For merchants that primarily process small ticket transactions (total sales price of less than $15.00), paying full interchange on small purchases can make the cost of accepting credit cards prohibitively expensive.
Some businesses work their way around this by enforcing a minimum sales price for credit card transactions and only accept cash when the sales price does not meet the minimum. This threshold can be frustrating for customers that don’t carry cash or prefer the convenience of paying by card.
How can businesses avoid paying high interchange fees on small ticket transactions?
Visa and Mastercard developed programs to encourage credit card acceptance at businesses that typically deal in small tickets. Here are the details of each program.
Visa CPS Small Ticket Interchange
Visa’s CPS (Custom Payment Service) Program allows retailers to qualify for lower interchange on small ticket transactions ($15.00 or less) when the following criteria are met:
- The transaction occurs in-person and a physical card is dipped, swiped, or tapped. CPS does not apply to card-not-present transactions.
- A consumer card is used for the transaction and is not a part of a rewards program.
- Settlement occurs in one day and the settlement amount matches the authorization amount. Exceptions may apply for businesses that accept gratuities.
Participating in Visa’s CPS Program can generate cost savings for retailers that meet these requirements. Click here to view the latest CPS fees published by Visa.
Mastercard Convenience Purchases and Mastercard Small Ticket Interchange
Mastercard breaks up smaller tickets into two fee categories. Convenience Purchases are those made at fast food restaurants (QSR), convenience stores, gas stations, and movie theatres. The same qualifications must be met as with Visa CPS, although the threshold of $15.00 does not apply. Instead, Mastercard enforces a breakeven amount (traditionally a sale amount of $38.46).
Mastercard’s Small Ticket program applies to transactions of $15.00 or less made at businesses in the following categories: mass transit, taxis, tolls, variety stores, specialty food stores, eating places, fast food/QSR, newsstands, laundries, dry cleaning, secretarial/court reporting, parking/garages, carwashes, movie theatres, video rentals, and postage stamps. Similar qualifications as Visa’s CPS Program apply. Click here to view the latest Convenience Purchases and Small Ticket fees published by Mastercard.
Does your business deal in small ticket, card-present transactions?
If so, your business may qualify for small ticket interchange programs from Visa and Mastercard. Contact us to learn more about how these programs can save your business money.