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  • Writer's pictureThe WAAVE Team

Understanding Rates in the High-Risk Industry

In the bustling world of high-risk commerce, from CBD products, Kratom to Hemp, understanding payment processing rates can sometimes feel like trying to decode an alien language. While many merchants sail through their business voyage unaware or misinformed, WAAVE's mission has always been to anchor transparency and fairness in payment processes.

With this go-to guide, our goal is to steer you through the choppy waters of non-negotiable fees, common pricing models, undercover costs, and how WAAVE is redesigning the terrain of high-risk payment processing fees and rates.

The Basics: Non-Negotiable Rates

Setting sail, let's first explore non-negotiable rates, set by the issuing bank and the card associations. These consist of fees, such as Interchange Fees (IC), Association Fees, and the additional costs of e-commerce surcharges and High-Risk BIN costs. Every transaction also carries a Gateway Fee, easily reaching up to $0.25. These costs are the backbone of the industry, dictating the minimum rates.

Payment Processing Rates: The Popular Models

High-risk payment processing has various pricing models on display, each bearing its unique payout.

  1. Rate Plus: Promising a seductive base rate, the surprise arrives when additional transactions get slapped with a surcharge.

  2. Three or Four Tier: Offering three rates—Qualified, Mid-Qualified, and Non-Qualified—it may seem inviting initially. However, over time, transactions trend towards the highest, 'Non-Qualified' tier, which increases costs unexpectedly.

  3. IC + Margin: This transparent model allows clients to know their exact charges. Watch out for the High-Risk BIN cost, though, because it could add up to 1% to your existing costs.

  4. Flat Rate Pricing: This model combines the interchange and margin charges, creating a fixed, predictable fee for every transaction.

  5. Alternative Pricing: A pricing strategy where costing the consumer takes center stage. However, be vigilant to abide by the State and card brand rules.

Unmasking Hidden Fees

Did you know about the sneaky hidden fees lurking underneath the payment processing rates? From monthly account fees, bloated chargeback fees to program fees, compliance fees, and more, there are hidden charges that could be added to your invoices unexpectedly.

The WAAVE Way: A Transparent Tide

The WAAVE approach sails three popular pricing models—eCommerce flat rate options, IC + 1.5% model for card-present transactions, and an alternative pricing program for those eager to reduce their rate. The core of WAAVE's model? Transparency and inclusion of all non-negotiable and most other fees in a fair, fixed rate.

So, if you're captaining a high-risk industry ship, knowing these rate secrets helps navigate the uneven tides of payment processing. There's no need to be a merchant sailing on unsure seas—with WAAVE's commitment to transparency, fairness, and industry expanse—you're in a steady, trustworthy ship that will get you safely to your business destinations.

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