When you have a merchant account, you may have noticed the small fees that are processed each time you swipe a credit or debit card for your customer’s transaction. The fees you are charged are based on the type of credit card that the customer is using and the total amount of the transaction. The credit card processing company that you have may offer different fees for the following types of credit or debit cards: Visa, Mastercard, Discover, American Express, and other major credit cards.
The fees that you may be charged will include a set fee plus a percentage of the transaction amount. You may be wondering exactly what those fees are for that are being charged? The set fee that is seen every time a credit card is swiped is for the approval or decline status message that is given back promptly 60 seconds after you swipe the card. This fee is going to be a set rate that will be determined in the merchant account contract for each brand of credit card that you plan of allowing your customers to use.
The percentage fee amount that is charged each time a credit or debit card is swiped is paid to the credit card processing company. This is for using their services in order to process credit cards. Some credit card processing companies may give the business credit card readers for free, but they will take out their percentage amount each time a credit card is ran on the reader or processed through the business’s website.
It’s important to know about the fees that are being charged to you or your customers every time a credit card is used. Your business will still benefit from taking credit card payments from your customers. You will be able to increase your sales which will give you more profit than just taking cash only. The fees can often be negotiable depending on the company your business is working with.
It is best to shop around before choosing a processing company that you are going to work with on all your credit card transactions. This way you can ensure the fees you are being charged are going to be at the lowest rates possible. The fine print will allow you to see if the rates can possibly increase later on and what other types of fees you may accrue on a daily or monthly basis.