When a customer pays with a credit or debit card, the merchant rarely receives the full transaction amount without cost. Several organizations participate in moving the payment from the customer’s account to the business, and each may play a different role in the fees associated with that transaction. One of...
How Credit Card Processing Fees Work
Credit card processing fees are the costs a business pays to accept card payments from customers. The percentage displayed in a processor’s advertisement, however, rarely tells the whole story. A merchant may also pay transaction charges, card-network costs, monthly merchant account fees, gateway charges, chargeback fees, and other service-related expenses....
How to Calculate Your Effective Processing Rate
The processing rate you see in an advertisement, proposal, or pricing schedule may not be the percentage your business actually pays. Once transaction fees, interchange, card-network charges, monthly account fees, gateway costs, authorization fees, and other merchant service fees are added together, the real cost can look different. That is...
Hidden Fees in Merchant Processing Contracts: What Merchants Need to Know Before Signing
A low processing rate can look attractive on a sales proposal. But the percentage printed in large type rarely tells you everything you will pay to accept cards. Merchant processing costs can include interchange, card network fees, processor markup, transaction charges, monthly account fees, gateway costs, PCI-related charges, equipment expenses,...
Non-Qualified Transactions Explained
Merchants reviewing a credit card processing statement may notice transactions grouped into categories such as qualified, mid-qualified, and non-qualified. Those labels can have a significant effect on processing costs, particularly when a merchant account uses tiered pricing. A non-qualified transaction is generally a card transaction that a payment processor places...
Membership-Based Merchant Pricing Explained
Payment-processing statements can be difficult to compare because the total cost of accepting cards rarely comes from one fee. A merchant may pay interchange, card-network assessments, processor markup, authorization charges, gateway fees, monthly account fees, equipment costs, chargeback fees, and other merchant service fees. Different payment processor pricing models package...