12 Feb Why Many Merchant Account Companies Charge Hidden Fees
There are benefits to using a merchant account, but there are various hidden fees involved. Understanding what fees are charged is useful when selecting a merchant account provider. When business owners have knowledge about fees, they gain a huge advantage. However, fees are not the only thing to consider. Business owners must also consider other elements, such as ease of use, setup, customer service, and more.
The discount rate involves the majority of the costs, so it is a very important fee. It is a percentage that is charged on every transaction. The fee is generally lower when a card is swiped, and it is higher when a card is keyed for transactions. For example, when a business owner has a discount rate of 2.5%, and the customer is charged $100, the fee will be $2.50.
Transaction Credit Card Processing Fees
A transaction fee is processed during every transaction. The fee occurs during approved and declined transactions. Usual transaction fees are 20 cents when a card is swiped and 30 cents when a keyed transaction is used. These fees are sometimes a bit higher for wireless transactions.
PIN Debit Credit Card Processing Transaction Fees
This fee is only charged when business owners take debit cards, and they have a terminal with a PINpad attached. This fee is generally around 70 cents; it is a fixed transaction fee. However, some merchant account providers charge a lower fee of about 20 cents. It is billed to the business owner’s debit network fee.
AVS Fees For Merchant Accounts
There are processors that charge this fee when business owners settle their daily batch and move funds to their bank accounts. If a business owner has no transactions on a specific day, the merchant account provider will not charge this fee. The fee can be as low as 5 cents or as high as 50 cents.
Monthly Statement, Support, And Service Fees For Merchant Accounts
This fee is a fixed fee, and it doesn’t matter how many transactions occur. The fee gives business owners a monthly statement, and customer support advice when it is needed. Generally, the fee is about $10 each month. However, some providers charge a higher fee at around $15.
Monthly Minimum Fee
This fee is not an extra fee. It is the minimum amount a merchant account provider requires a business owner to generate every month. When the monthly fees are lower than the minimum amount, the business owner will be charged the difference.