C
redit card processing fees can be difficult to understand. They depend on which model the merchant provider uses. It’s important to know how they work, so you can ensure you don’t overpay. This guide will give you the information you need and explain the four main factors that affect processing fees.
Merchant Provider Fees
You’ll require a merchant account to process a credit card. Merchant account providers charge an additional fee as well as the interchange rate. You can negotiate with providers and deals can be made based on the type of business you run and your sales amounts.
Interchange Rates
An interchange rate is charged by credit card companies such as Visa and Mastercard during processing. Merchant account providers pay interchange rates to the card companies and there is no room for negotiation. The interchange rates vary depending on the credit card but you can see a list of rates here.
The Processing Method
Cards processed in the place of business incur lower fees. This is due to the reduced risk of fraud. Transactions on the internet and telephone incur higher fees because of the fraud risks.
Initial Setup and Monthly Fees
Merchant account providers often charge a setup fee and require monthly payments to maintain security and support. They also ensure businesses remain PCI Compliant.
Now it’s time to decide which merchant provider is best for you.
