What is a commission and how does it work in Clip?
Why are they charged? What are Clip commissions? How are they calculated so that you know how much money you will be deposited for each transaction? Below we answer your questions related to the commissions for accepting credit, debit and other cards.
In order to explain what a commission is, at Clip we want to quote Condusef description: "[...] commissions are charges, other than interest rates, made by the Institution that grants the financial product, and whose purpose is to cover the direct costs and administrative expenses related to the same.
Such charges are generally caused by two main reasons: the contracting and/or operation of the financial product or service, i.e., Financial Institutions will charge you for supplying you with the product and/or for its operation (...)"
At Clip, for example, we offer you a reader that will enable you to accept credit and debit card payments from your smartphone or tablet. For this, we charge a commission.
On a normal transaction (i.e., when customer pays in cash), at Clip we have a commission of 3.6% plus VAT. So, let's say you charge 100 pesos for a product and $95.82 pesos will be deposited to your account, since a commission charge of $3.60 pesos plus 0.58 cents for VAT was made.
Remember that in Clip:
- We have no minimum billing. This means that it is not important if one month you decide not to use it or you sell any amount, unlike bank POS terminals that ask you to sell a minimum or charge you a fine.
- We do not charge you monthly commissions for using your reader, unlike the monthly fees that some bank terminals charge; once you acquire your Clip reader, it is already yours and customer service will always be available to help you solve all your doubts.
- No fines. No matter if you do not use the reader frequently, your account as well as the device do not generate extra charges if you do not use it, as if we were a bank that charges you for having an account with them.
However, Clip commissions for interest-free monthly payments (MSI) vary a little, as there is a bank surcharge, basically a charge made by the bank for the risk it is acquiring when it lets you apply the MSI.
Also, this amount actually increases if the monthly payments grow, so the longer the payment time, the higher the surcharge amounts, however, Clip commission will always be 3.6% plus VAT. Below you will find a table that explains the total withholdings that you will be charged for each concept.
For example, if you charge $1,000 pesos for 3 months free of interest, you will receive $906.04 pesos, $36.00 pesos will be withheld for the Transaction Commission, $45.00 pesos for the surcharge and $12.96 pesos for IVA (Value Added Tax).
In case of any doubts, go to our page where you will find a calculator to find out the total amount you will receive in your account. It is important for you to know that as part of the terms and conditions that you accept with Clip, as well as by Condusef rule, you cannot charge this commission to the client.
Here is the part where we mention that you should not charge more for accepting cards in your business:
"You (the Client) may not (i) demand any minimum payment limits for the acceptance of a card, (ii) apply higher prices or additional fees for the use of a card in connection with a payment transaction..."
While it is correct that many businesses disagree with this policy, they should keep in mind that by accepting these types of charges, you are increasing your sales, so you will be applying commission on sales that you would not normally do.
Reduce commissions with Clip
The way to lower transaction fees is a way that very few businesses use or know about. It is a very simple solution: top-ups to the main telephone companies through the Clip reader.
When offering top-ups, you can select the option that the payment method is "Discount on commission" and thus the profits you generate through the top-ups are applied as a discount on the commissions earned on card sales.
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