Government Contracts and Pcards: Unlock Hidden Savings is not just a catchy phrase—it’s a proven strategy. Nearly 15 years ago, Visa and MasterCard introduced special interchange rates designed to encourage contractors to process government contracts correctly. This approach can reduce your interchange costs by up to 40% on commercial transactions. Yet, statistics show that 3 out of 5 contractors are not set up to capture these savings, leaving significant money on the table.
Understanding the Opportunity/Your Government Contract and Pcards
When it comes to government contracts and Pcards, you have the opportunity to qualify for substantially lower interchange fees. These fees, determined solely by the card-issuing banks, can account for up to 80% of your total processing costs. However, without optimizing the data you submit, such as purchase order numbers, detailed product descriptions, quantities, and tax information, transactions can clear at a higher rate—costing an additional 80 to 150 basis points on every transaction.
Why Proper Setup Matters
Even if your processor offers competitive rates, the true savings lie in the details:
- Interchange Complexity: There are over 937 distinct interchange rates and rules that can dramatically affect your cost structure. These rules are updated every April and October, meaning what worked last year may not be optimal today.
- Hidden Costs: Up to 80% of your processing fees come from interchange—not your processor’s markup. This is why capturing every required data field is critical.
- Missed Opportunities: Failing to enter the extra 10 data fields needed for full qualification can result in unnecessary costs, leaving significant revenue on the table.
How Revolution Payments Can Help
At Revolution Payments, we help ensure that every eligible transaction is optimized to capture the lowest possible interchange fees. Our expertise lies in educating contractors on the nuances of interchange rates and helping you set up your payment processing to fully leverage these benefits. By fine-tuning your system, you can unlock savings that many competitors miss.
Real Savings in Action
Consider this example:
- For a $10,000 commercial transaction, improper data capture could cost you an extra $150 in interchange fees. Multiply this across hundreds of transactions annually, and the savings quickly add up—potentially reducing your processing costs by up to 40%.
Take Action Today
Make the most of your government contract and Pcards. Don’t let hidden interchange fees drain your pit’s time to review your setup and capture the savings you deserve.
Contact Revolution Payments today for a free, no-obligation analysis: