OK, some good news for all of you that keep saying I'm all doom and gloom. Sadly in this industry, it will often seem as if I am because of all the issues out there to be faced. At least I am trying to do something about it, so don't judge me. You should be sending me birthday cards instead.
Discover has now changed it business model. Formerly, when one wanted to accept credit cards, They would get MC and Visa, then opt for Discover and/or American Express. The problem is that though they could negotiate low fees for MC and Visa. They could not do so for Discover and Amex. In fact those two set their own individual prices, which were non negotiable, and they were very high for industry standards. The main reason Discover was always so high was that it was a cash back card that paid the card holder a bonus to incentivize them to always use that card. Well someone has to foot the bill and it's always the merchant (for more painful truths on this read about Rewards Cards).
Well with all the changes in the cards out there and everyone getting rewards back one way or another, Discover just about got priced right out of the industry. What to do? Become a third link in the MasterCard/Visa chain. They dropped their rates to be the same as the main two and even if you already take Discover your rates have recently dropped. However, don't take that on faith. Pull a merchant statement from last month. If you do not see Discover's rates in line with MC-Visa, call your MSP (merchant service provider) and tell them that they will drop your Discover rate to MC-Visa levels, or you will find someone who will.
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