When you accept credit cards as a form of payment, you’re likely to be charged a processing fee by your merchant account provider. This fee is generally a percentage of the total transaction amount, and it’s intended to cover the costs associated with processing credit card payments.
There are a few different types of fees that you might see on your credit card processing statement, and it’s important to understand what each of them represents.
- Interchange fees are the most common type of free charged by merchant account providers. These fees are set by the credit card associations (Visa, Mastercard, etc.) and they vary depending on the type of card being used and the transaction amount. For example, a Visa credit card with a rewards program will generally have a higher interchange fee than a standard Visa credit card.
- The second type of fee is called a network access fee, and it’s charged by the card issuer (the bank that issued the credit card to the customer). This fee covers the cost of providing access to the credit card network.
- The third type of fee is called a merchant account fee, and it’s charged by the company that provides your merchant account service. This fee covers the cost of setting up and maintaining your account, and it may also include charges for customer support or other services.
- You may also see a fourth type of fee on your statement, called a chargeback fee. This fee is charged by your merchant account provider if a customer disputes a charge and requests a refund.
When you’re shopping for a merchant account, it’s important to ask about all of the fees that will be charged. Some providers will charge higher fees than others, and some may even offer discounts on certain types of transactions. Be sure to compare the total cost of each merchant account before you make your final decision.
Credit card processing fees can seem confusing at first, but they’re actually quite simple. The three main types of fees are interchange fees, network access fees, and merchant account fees. You may also see a chargeback fee on your statement if a customer disputes a charge. When you’re shopping for a merchant account, be sure to ask about all of the fees that will be charged.
How to lower Credit Card Processing Fees?
There are a few things you can do to lower your credit card processing fees. One is to negotiate with your processor. If you’re doing a lot of business, they may be willing to lower your rates. Another is to ask for interchange-plus pricing.
This is where you pay a fixed percentage plus the actual interchange rate. Interchange-plus pricing can be a good option if you’re processing a lot of transactions, because you’ll know exactly how much you’re paying in fees. You can also look for processors that offer discounts on certain types of transactions, such as online or mobile payments.
By understanding the different types of fees charged by merchant account providers, you can be sure to get the best deal possible. Be sure to ask about all of the fees that will be charged, and compare the total cost of each account before you make your final decision.