Total electronic credit card authorization is heavily dependent upon data communication costs. The response time is five seconds or less.
Revising rate structures could well increase the cost of all electronic transactions by as much as three cents as deregulation takes place in the communications industry.
CHECK VERIFICATION/GUARANTEE PRICING
Check verification/guarantee costs depend, as shown in Exhibit 111-17, upon the types of services offered.
Check verification services alert the retailer to bad checks and potentially marginal ones, but leave the credit decision in the hands of the retailer. Check verification services are generally regional or local in nature and are contracted for primarily between the services offerer and the retailer directly.
Check verification services are priced according to the type of verification utilized and on transaction volume. Check verification costs run somewhat higher (20-30%) than corresponding credit card authorization costs.
There are no interchange networks involved (except occasional interchange with credit card networks).
Transaction volume for check verification is less than one-tenth credit card authorization transaction volume.
Check guarantee services are primarily offered to retailers directly. Even when offered to financial institutions, the services offerer underwrites check losses.