When it comes to merchant account fees, the processor adds its processing costs plus mark-ups for credit risk and kind of company risk to the costs passed on by the banks and credit card firms.
In addition, processors do not all employ the same price strategy. The top four credit card companies publish their credit card processing fees annually. Visa, for instance, publishes its interchange costs online for all merchants and customers to view.
While a merchant cannot negotiate interchange rates with a bank or a credit card firm, they can negotiate some processing fees. To effectively negotiate with a processing provider, you must first grasp how they calculate merchant account costs.
Fees for Credit Card Processing in a Merchant Account
Interchange Fee
These costs are frequently based on the overall charge amount and are not a fixed number that you can forecast. Fees are also different depending on the location and whether the card is tapped, dipped, or swiped.
Processing Fee
The payment processor will also charge a flat fee and commission. The rate and percentage for these charges are determined by the type of merchant, processing volume, and other factors.
Some elements that have a significant impact on processing fees are the type of card (credit or debit), credit card provider (Visa, Mastercard, Discover, American Express), and the method by which the credit card enters the system (Point of Sale Systems, Manual, online payment, mobile, etc.). The type of business structure and annual sales also determine the fee’s factors.
Transaction Fees
The transaction cost is a one-time, flat price applied to each transaction in addition to the processing fee. This cost can range from $.10 for swiped accounts and $.25 for keyed accounts.
All accepted and denied transactions, as well as batches and returns, are subject to the cost. There is a charge to use the processing network. As a result, it is charged each time the network is used.
Administrative Fees
Some providers include flat fees to maintain your merchant account. These fees vary depending on the processing company, including annual, monthly minimum, statement, wireless, and PCI non-compliance fees.
Beware Of Hidden Fees
Some processors may attempt to charge higher fees than are required. If you are charged with an application fee, setup or startup fee, sales transaction fee, or retrieval fees (when you seek a copy of the transaction receipt), call your processor and ask them to break out the price and explain why it was charged.
Understanding credit card processing will assist you in locating a credit card processor company that is a good fit for your company. Contracts differ depending on the processor you use; it’s critical to review the charges and terms and conditions before signing anything. If you want to switch processors, find out their prices and then have them break down your statement for you.
Work with Certain Pay in Richfield, Ohio.
The best way to determine how much your traditional processing fees will be is to speak with a merchant services provider about their pricing structure. At Certain Pay, we’ll assist you in determining what your company requires and what to expect from our services.
We are totally transparent about our fees, so you can rest assured we will build a valuable partnership with you. Once you’re set up with a merchant account, you’ll be ready to start accepting credit cards from your consumers.
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