Elavon • Article • U.S. Payment Smart (August 2026)
3 min. Read

Another effective way to cut your cost of payment card acceptance is by avoiding downgrades. Downgrades result from actions you take – or don’t take – that increase the fees collected by the card networks (Discover, Mastercard, UnionPay, Visa). These additional fees are designed to address risk – primarily security related – and can usually be avoided by following best practices.

Here are the most common reasons for downgrades and steps you can take to avoid them.

• Address Verification Service (AVS) bypassed. When prompted by your payment acceptance system to enter a postal code, don’t skip this step. It could result in the cardholder’s address and postal code being mismatched or missing.
   
• Electronic payments not balanced and settled daily. Settle daily or at least within 24 hours and use auto-settle if possible.
   
• Authorization and settlement amounts differ. If the settled amount doesn’t equal the authorized amount (except for allowed adjustments like restaurant tips), card networks may downgrade, reject or return the transaction.
   
• Use of voice authorization to force transaction authorizations. Avoid using voice authorization to manually enter a reference number in your terminal.
   
• Terminal software not up to date. Be sure to stay current with your software updates, many of which help device operation stay secure and in compliance with card brand data security standards. It’s also important to replace your point-of-sale terminal if it is so old that it can no longer accept software updates.

Once you’ve minimized downgrades, it’s worth looking at offsetting payment acceptance costs. Credit Card Surcharge adds a small fee to a transaction when a customer chooses to pay by credit card – whether in person or online. Because federal, state and card network rules are strict, Elavon offers a fully compliant surcharge program.

If you accept a lot of commercial cards, it’s worth looking into Elavon’s Commercial Card Optimization program. We help you capture more extensive commercial card transaction details during payment which can improve account authentication and qualify eligible B2B transactions for lower interchange rates.

Certain state or local laws may restrict or limit the amount of the surcharge percentage. Although we offer surcharging in most states, Merchants are responsible for determining the legality of surcharging in their states, and merchants are liable if their activities are found to be unlawful. Credit card surcharge applies to credit card only, not available on debit cards.

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