Higher Transaction Fees for Manually Entered Card Payments
Stripe, an industry-leading payment processor, recently announced an exorbitant rate increase that’s set to kick in on November 10, 2022, for manually entered card payments, also known as manually keyed transactions. If your business manually enters cards on the Stripe Dashboard to receive payments, you’ll soon be paying 0.5% more on each transaction. Specifically, Stripe is bumping their manually entered card payment transaction fee up from 2.9% + $0.30 to 3.4% + $0.30.
How painful will this increase be for merchants?
If your business depends on manually entering your customer’s card to receive payments, this transaction fee increase will hurt your bottom line significantly. Stripe is a popular entry point for new businesses (especially B2B) as it’s easy to use, especially while manually entering cards. This form of payment is a primary method for merchants who are just starting their B2B business. As a result, the 0.5% transaction fee increase will make it increasingly difficult for new businesses to hit the ground running and could stifle their growth.
Although it may not seem like much on the surface, 0.5% can add up quickly when considering the processing volume of your business. Because of this, larger and more established businesses will also feel the squeeze from this increase. When it’s paired with the inflationary pressures that are gripping the economy today, higher rates are just another merchant headache waiting to happen.
Why the rate increase for manually keyed transactions?
Manually keyed transactions are notoriously risky due to the nature of the payment. Instead of passing card details in a secure and encrypted manner, manually entering card information strips away security precautions that are baked into other payment methods like swipe, dip, or tap. Stripe explains the impact of fraud and security in their rate increase announcement:
“This price increase reflects the cost of higher fraud rates associated with collecting customer card details by phone or other unencrypted sources. Directly typing in sensitive customer data bypasses much of the security that’s built into Stripe’s online payments. As a result, we see higher fraud rates on manually entered payments, leading to higher costs for Stripe.”
It’s true that manually entering your customer’s credit card information into the terminal is riskier than many other forms of payment. But sometimes, it’s the only way for merchants to complete the transaction. Perhaps your customer’s card is damaged, or your payment system isn’t reading it properly. Manually entering the card information could be the only way to complete the transaction. Keying in card details is also an important component of Mail Order Telephone Order (MOTO) payments.
Prepare for the Price Hike by Reviewing Your Rates
With a massive rate increase on the horizon, now is the best time to do research on alternatives if your business utilizes manually keyed transactions. If you’re currently on Stripe, contact us for a rate review. We can reduce your rates back to 2.3% or even lower if level 3 processing is achieved. It’s not uncommon for our merchants to save 40% on their rates with little to no effort on their part.
Let us do the work for you – request a cost analysis or send us a message. We’ll use our deep network of industry partners to fight for the lowest rates possible for your business.