31 Jan The Typical Fees That Accompany a Merchant Account
For many businesses, a merchant account is absolutely essential to success. Because of this, the best option is to find a credit card processor that fits the needs and price range of one’s own company. There are a variety of different fees that accompany credit card processors and they should be examined closely in order to ensure there are no hidden expenses in the fine print. To get a good idea of what to look for, be sure to check out these common credit card processing fees.
Many different merchant accounts function on a tiered pricing system, and this system can heavily influence the amount of money paid for processing. These tiered pricing systems typically have three fundamental categories: qualified rate, mid-qualified rate and non-qualified rate. Typically, the qualified rate is reserved for when a merchant is able to swipe a credit card on site. The qualified rate is what all those with a merchant account should aim for, as it is doesn’t accrue as many excess fees as mid-qualified and non-qualified transactions.
Depending on the merchant, a mid-qualified or non-qualified transaction can be a result of manually entering a credit card into the terminal as opposed to swiping. Whether the transaction is considered mid-qualified or non-qualified is dependent on the card being used and processor guidelines.
Monthly Minimum Fee
For many different merchant accounts, there is a specific minimum monthly fee that must be paid in order to continue service. The minimum monthly rate depends on the processor and a variety of other factors. This rate functions as a safeguard for these processors which ensures that at the very least, a small amount of money is paid for their services. For example, if the total monthly fee for one’s business was 25 dollars, yet the minimum monthly fee was 30 dollars, an additional five dollars would need to be paid in order to continue service.
Another large expense that many don’t consider when shopping for a good processor is the refund fee. Refunds are charged as separate transactions and can have additional fees attached to them as well. Because of this, if possible, be certain to limit the amount of refunds each month as they can quickly cause a large amount of fees to rack up.
Be wary of vendors whose rates are extremely low because there is often fine print that ensures that one way or another, shady processing companies will find a way to charge large amounts of fees. To avoid this, be certain to read reviews of different processors prior to using them. Additionally, by examining all of these common fees in detail, one will be in a much better position to have great experience with a credit card processing company.