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Card fee, transaction fee and acquiring agreement

Most people have some notion of what is what, but sometimes it can be nice to have it set up simply. So, whether you’re an expert, just need to have it refreshed or know nothing about it, you can find the answer in this post.

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Card fee

A card fee is the fee that is charged for a transaction made with a card, but has many more facets than this. A card fee can be imposed on both the business and the cardholder, but is imposed for various reasons.

When a consumer has a card and chooses to use it to pay for an item or service, there are many parties at stake. There is a bank, an acquirer and a business and all have a function to perform and therefore a card fee must be paid. The amount that the company pays is the total fee that the entire chain deducts

Card fee and b2b

In the past, it was possible, as a company, to transfer some of that fee to the cardholder if this was a company card. The so-called Surcharge. This is only partially possible today and only on Danish company cards and on foreign, non-EU cards.

But there is also an annual card fee involved if you just have a card. Banks often have a certain rate that you, as a cardholder, pay when you get a card. A fee that you pay once a year and the size will often depend on the type of customer you are. Whether it’s a Visa Card, Master Card, Diners or something completely different. It is a good idea to keep an eye on and can easily be a price that you as a cardholder can negotiate. It is possible that you do not think DKK 200 a year is a lot of money, but if you have more than one card, this can easily run up. So, watch out before you say yes to another Visa card.

Card types

Most Danes have grown up saying that they have a Dankort. Today it is both right and wrong. Most Danes today have a VisaDankort card (a so-called co-branded card), but are actually not aware of it. This means that the card is actually divided between Visa and Dankort and depending on where you use your card, it is different parts of the card that are used. If you take your VisaDankort abroad, the Visa part is used, as a Dankort can only be used in Denmark (except for a few border transactions).

If you use the card in Denmark in a card terminal from Nets, it is probably the Dankort part that is used. I write “probably”, as it completely depends on what type of acquiring agreement the owner of the terminal has. Sometimes, at the bottom of the receipt, you can see which part of your card has been used. Here it will be stated whether it is a Dankort or credit card / Visa.

There are only approx. 4% pure Dankort left on the Danish market, according to Statistics Denmark and many banks no longer choose to issue them, as it is not profitable for them

Transaction fee

A transaction fee covers, as the words say, is a fee charged when an item or service is exchanged. So, it is not a fee on the item, but a fee on the exchange of money. This applies to cash, cards, Bitcoins or other.

When trading digital money, in some cases there may be a charge for both transaction fees and card fees – for example, as is the case with MobilePay. The transaction fee will most often be a fixed amount, while the card fee will most often depend on the amount. For example, if you receive DKK 100 for an item as a business owner, and have a redemption agreement for a card fee of 1.35% and a transaction fee of DKK 1, the calculation looks like this:

Amount received: DKK 100.

Card fee: DKK 1.35.

Transaction fee: DKK 1.

You actually receive: DKK 97.65

Is there a difference in how the money is received?

There can be different payout days for different card types and it can be difficult to figure out when to receive the money and what amount. Among other things, this is one of the things that we at Yourpay have changed. You pay the same card fee, on all transactions, regardless of the payment method and the type of card used. And you get the money paid out, after the number of days that have been agreed. If you want to know more about how we charge you can see our prices here.

Acquiring agreement

An acquiring agreement is an agreement entered into between a company that wishes to be able to receive card payments and a financial institution that is to handle the transfer from the cardholder to the company. That’s the simple explanation. There are many more links, but it’s a whole blog post in itself, which of course I’ll probably have to write.

An acquiring agreement includes the card types and rates that the acquirer charges on behalf of the company. These agreements can be very different and often depend on which acquirer is involved. In Denmark, there are very few acquirers, and most are dependent on Nets. Yourpay is the only independent acquirer in the Nordic region and therefore we have the opportunity to give our customers completely separate and favorable prices and products.

What should you be aware of when you need an acquiring agreement?

Your business form is the most important element when you need to have an acquiring agreement. Here are some key questions you should ask yourself:

  1. Who are your customers? Do you sell primarily to the Danish market, or do you also export?
  2. What platforms do you want to sell from? Webshop? Physical business? Only with invoice?
  3. Do research and ask yourself: what is the real price you pay if you receive DKK 100?
  4. Are you willing to commit to a subscription? And if so, how long is your maximum?

If you have a business, you need to decide for yourself what types of cards you want to receive. For example, if it is important for you to be able to receive pure Dankort, you are forced to have an agreement with an acquirer who also has an agreement with Nets. If, on the other hand, it is more important for you to be able to receive foreign cards, you can choose almost any acquirer.

Physical store

If, on the other hand, you have a physical store, it can be an advantage to choose an acquirer, who also offers terminals. Otherwise, you may end up needing several acquiring agreements, and then it can quickly become unmanagable.