If you are working with a payment provider that offers you lower fees, this may be possible for multiple reasons. Below are a few of these reasons as well as questions you could ask your provider before speaking with our sales team.
Hidden fees
This is the most common reason why some providers appear cheaper than others. Hidden fees come in all shapes and sizes. They range from settlement fees, fixed fees, FX fees (charges for non-AED currency payments), etc.
Always ensure your provider gives you a clear and transparent end-of-month statement of fees. And always double-check that the price you signed up for is the price you're actually being charged each month.
Beyond basic "fixed fees," look out for these specific costs that often surprise businesses:
Cross-border fees: Extra costs often apply when a customer's card is issued outside your country, even if your business is local.
FX Markups: Currency conversion markups can be "invisible" because they are often applied as a spread on top of the exchange rate.
Premium Card Variability: Cards like corporate or high-tier rewards cards often cost more to process, which can cause your effective rate to fluctuate based on your customer mix.
In-person vs. "card not present" pricing
Generally speaking, when you accept payments in person using POS terminals, you will always avail a lower transaction fee than if you were to accept payments digitally or remotely.
Why? Well, card-present transactions generally eliminate a lot of the fraud risk that is always present in our industry. Therefore, when comparing pricing between your provider and Mamo, it's important that you compare Mamo with your provider's "card not present" pricing. Comparing POS terminal pricing with online payment acceptance pricing is not an apples to apples comparison.
Miscoded MCCs
Sometimes, your payment provider may be offering you lower pricing through something called MCC miscoding. This happens when your business's industry is misclassified (intentionally or not) by the payment provider.
Since different industries have different transaction fees, a payment provider may classify your business as an industry with a lower fee.
Although this may sound beneficial, keep in mind that there are huge risks with this including the payment provider being fined by Visa or Mastercard and the fine being passed on to you.
It is also not a sustainable practice and should raise alarms on the integrity and reliability of your current provider. Always ask your provider which MCC you are classified under, and see if it matches your business's true sector.
Bundling
Often times, you may be getting favorable pricing on the payment acceptance side while being over-charged elsewhere (e.g., loans or credit cards). Additionally, some providers charge extra for "add-ons" that become essential as you grow, such as advanced fraud tools where base rates might cover processing, but enhanced security or reporting features may carry extra fees.