Nets Explains
What is an acquiring agreement really?
To be able to accept card or mobile payments in your webshop or in your physical store, you must have an acquiring agreement. Often, an acquiring agreement is also called a card agreement - or a payment card agreement, which is the same. In this blog post, you can read more about what an acquiring agreement is and what you should consider before making your choice.
How does an acquiring agreement work?
An acquiring agreement ensures that the money for a purchase at your store is transferred from your customer's bank account to yours when the purchase is completed. Before the purchase is completed, the card is automatically checked for whether it is valid or if it has expired. If not, the purchase will be rejected.
It’s also your acquiring agreement that determines which card types and card brands your customers can pay with in your store. If a customer tries to pay with a card that is not part of your agreement, the purchase will be rejected.
How fast you have your money after a sale depends on what card has been used to pay. If your customer has paid with Dankort, you’ll have the money the next day. If the customer has paid with a Mastercard, Visa, Diners, Discover, JCB or UnionPay, you’ll receive the money in your account within a few business days after the purchase, depending on your agreement and in which country your business is located.
Where can I get an agreement?
There’re several companies, called acquirers, offering an acquiring agreement for international payment cards such as Visa and Mastercard. Nets is one of them.
If you want to be able to accept payments with Dankort as well, you must have a specific Dankort agreement. Nets is the only acquirer of Dankort agreements.
What cards should I accept?
With all the different debit and credit cards on the market, it can feel like a jungle to choose which cards to accept.
Visa and Mastercard are among the most used cards.However, there’re other widely used cards like American Express, JCB, UnionPay, Diners and Discover. As a merchant, you can accept all the cards you want, as long as you have them included in your acquiring agreement. But it's a good idea to consider which ones that suits your business and your customer base. If you e.g., have many tourists from Asia, you might want to accept JCB and UnionPay not to miss out on valuable sales. Keep in mind customers often choose stores that accept the cards they prefer to pay with.
What’s the price of an acquiring agreement?
When deciding on an acquirer, it can be confusing to compare prices, as the total price can be presented in different ways. There are several components, that companies might use to present the price - here are three of the common ones you need to be aware of.
Monthly fee:
The first one is the monthly fee, which is a fixed amount you might pay for your solution per month.
Percentage transaction fee:
The second one is the transaction fee presented as percentage. The transaction fee varies depending on the card your customer is using and is only charged when a payment is completed. The transaction fee is based on the card type or card brand used.
Card type is the following:
Whether the card is issued domestically, in the EU or outside the EU
Whether the card is a private or a corporate card
Whether the card is debit or credit, i.e., whether it’s possible to spend money now that’ll be drawn from your bank account later or they’ll be drawn right away
The cost for accepting payment cards also depends on the specific card brand your customers prefer. All acquirers offer Visa and Mastercard, which are the most used brands. If you have foreign customers, their preferred brands could be American Express, Diners Club, Discover, UnionPay, JCB. (Link to page presenting the card brands).
So, even though Visa and Mastercard often have a lower transaction fee than other brands, by accepting all brands you can offer the best customer experience and never lose a sale.
Fixed transaction fee:
The third component you should be aware of is the transaction fee, which is a fixed amount. Acquirers sometimes charge a fixed amount per transaction, either instead of the transaction fee percent or in addition. This fixed amount will also likely vary depending on the card type.
When you’re comparing prices and are looking for the three components described above, be aware that some acquires bundle their solutions. This means that you pay one total price for your subscription and a terminal in one package deal. Furthermore, like in many other industries, the prices offered by acquires are often influenced by the size of your revenue. Essentially, the higher your revenue is, the cheaper fees you will be offered.