There are so many fees and charges that can be associated with a merchant account, it is hard to understand exactly what you will owe. It is important to understand all the different fees and merchant account charges, so you will be able to compare merchant service providers. Risk is the lack of knowledge, the more you understand about the fees, the more power you will have in being able to choose the best merchant services provider.
Once you understand all the different possible fees and merchantaccountcharges, you will be able to weigh them against other important factors, so you can choose the right merchant services provider for your business. Some of those other deciding factors will be customer service, ease of setup and use, the companies reputation, along with others. You will want to find a balance of these factors and charges to find the right merchant services provider to provide your business with affordable, feature rich merchant services.
Set Up Fee or Application Fee is the initial amount that you are charged to set up your account. Historically, everyone charged this fee, but recently fewer and fewer companies charge a set up fee.
Reprogramming Fees are charged when you begin a new merchant account and you need to have one of your terminals reprogrammed. This fee is charged to cover the time it takes to reprogram the terminal.
Transaction Fees are the most common fee that is charged every time there is a transaction, even if the transaction is ultimately declined. Currently these fees for transactions are approximately 20 cents when you swipe a card, with another 10 cents added on for a keyed in transaction. Wireless transactions often have additional fees involved for each transaction.
Transaction Fees for PIN Debit Cards are the fees that are charged for transactions when debit cards with a PINpad that is attached to the terminal are used. This fee can be charged in a couple of ways, with one being that you are charged a transaction fee that is low, approximately 20 cents, then you get an additional charge called the debit network fee and is determined by the debit network. The other way you can be charged this PIN debit card transaction fee, is to be charged a fee that is fixed, typically about 70 cents.
Daily Batch Fee or ACH Fees may be charged for settling your batch everyday, which is done to transfer the money into your account. You will not have to pay for the daily batch fee on days that there are no transactions. Merchant service providers will charge fees as low as 5 cents or as high as 50 cents.
Retrieval/Chargeback Fees are charged when either the issuing bank or the customer disputes any transactions. This happens if the customer sees a charge on their bill they do not recognize, or the service or product is in question, possibly the card had fraudulent charges. The merchant will need to write a response and document on any of these disputes.
Service Fee or Monthly Statement charge is typically a fixed fee that is charged every month by your merchant service provider. This fee will not change if the number of your transactions change, it will remain the same every month. A valuable benefit that this monthly fee covers, is the access to customer support, which you will find invaluable. You will pay anywhere from $10 to $20 per month for a monthly service fee.
Annual Fees are charged by your credit card processor once a year, as part of your merchant account charges.
Voice authorization Fees are for merchants that need to call in for authorization on the transaction, because the terminal is not working. This is not a service that is used often, it is a service that is available as a backup option when you have terminal issues. The fee can range between 75 cents and $1.50 each time you request a voice authorization.
Internet Gateway Fees will apply when you use an Internet payment gateway, you will not pay this fee if you are using a terminal or software. The gateway provider is typically where the monthly gateway fee comes from, and is sometimes paid to your merchant service provider, and sometimes it is paid directly to the gateway provider. The gateway provider often charges as much as $30 per month, with some of them also charging an additional transaction fee, which is over and above the transaction fee that is paid as part of the merchant account charges.
Monthly Minimum Fee is the amount charged when you do not generate enough business to meet a minimum amount that is set for the month. The fee is based upon your monthly fees, and if you owe less than what the monthly minimum is set at, then you will pay the difference to equal the monthly minimum. If you owe $15 in fees for the month, and your merchant account charges a $25 monthly minimum fee, you will have to pay the additional $10 to make your total payment equal the monthly minimum.
Surcharge/Partially & Non-qualified Fees can be charged under any of these names, and are associated with particular card types. Most cards do not have this additional discount fee, however, there are some reward cards, corporate cards, international cards, among others which do charge this fee, which can range between .5% and 2.5%.
Termination or Cancellation Fees are charged by all the merchant service providers. It costs a lot to get a merchant set up with their new merchant account, and the cancellation fees help the merchant service providers get back some of their investment if a merchant cancels early. There are times that the merchant service provider is willing to discount or waive the termination fee for the merchant, depending upon the circumstances. This fee is typically a fixed or set amount, but sometimes can be variable, depending upon the merchant service provider.
Hidden or Junk Fees cover a variety of different fees that merchant service providers can charge. Charging a very low rate, that increases after the first few months of service, is a typical hidden fee that is frequently seen. Reading your contract carefully, will uncover a clause stating the discount rate can be changed at any time the merchant service provider wants. Some companies charge different rates for each type of card, and only point out the lowest one, causing you to be mislead thinking all the card rates are the same. These hidden or junk fees can be made up of many different additional fees with names like, security fee, file fee, conversion fee, audit fee, excessive transactions fees, over-limit fee, even billback fees. The morale to this is, examine all the fine print carefully in the contract, because you could be paying extra hidden fees every single month, for the term of the contract.
VIP Credit Card Processor offers credit card processing services to 9 out of 10 merchants that apply, with some of the most flexible terms in the industry. The merchantaccountchargesof VIP Credit Processor are some of the lowest in the industry.
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