Opinion: Fee disclosure requirements means better business

Many business members of Associated Industries of Missouri rely upon secure credit card transactions as an integral part of everyday business transactions. But business owners might not know up front what fees are charged. MasterCard Inc. (NYSE: MA) plans to provide more transparency in the process, and we support that transparency.

Today, electronic transactions are the norm and are good for businesses of all sizes. The technology that makes these transactions possible uses a network to process and transmit payments. Businesses receive the payment from the cardholder’s bank immediately, and the fraud protection embedded in the technology makes sure the transactions are secure.

However, understanding payment processing fees and negotiating rates can be daunting, especially for small and midsize businesses. Confusion regarding fees and rates causes problems and can be eliminated through self-education of the fees. The key is for business owners to understand the exact fees that are charged and how they are structured so they can compare rates of different payment processing companies and negotiate the best deals.

MasterCard is about to require all processors who access their electronic payment network to provide their business customers with a clear and detailed disclosure of each fee and how it is calculated. Small-business owners will be able to see their base wholesale cost for using the electronic payment network, better known as the merchant discount rate, and how it is calculated so the owner-operators better understand their rates and fees up front.

Payment processors also will be required to provide business owners with at least 30 days’ advance notice before increasing or introducing any new fees related to MasterCard accounts or transactions.

This is important for the business community and will help merchants control costs and negotiate for better deals.

We hear the word transparency constantly in the business and political arenas. MasterCard is leading the way to make the costs and benefits associated with electronic payments transparent in a real and meaningful way.

—Ray McCarty, president and CEO, Associated Industries of Missouri[[In-content Ad]]