Credit card services are essential to most modern businesses, as a growing number of customers depend on credit and debit cards to make the majority of their purchases. However, many companies worry that the fees associated with credit card processing companies will outweigh the benefit of taking bank cards, especially in niche industries. Understanding the various fees that are assessed by credit card services is important for planning and deciding which processing company to use. Unfortunately, getting a full list of fees can often be a complex process and often means carefully reading processing services’ contracts.
One of the most important costs of credit card services is the per-transaction fee added to each customer purchase. Per-transaction fees vary greatly by credit card issuer and by credit card processing service, so most businesses look at these fees first when deciding on a company to use. No reputable credit card processing company charges the same rate for all of its users. Quotes are determined based on the expected number of transactions in a month, the size of those transactions and a number of other factors. Most credit card services also set out a monthly minimum in their contracts, and businesses may have to pay a penalty or risk a downgrade to a higher interest rate if that minimum isn’t reached.
In addition to per-transaction fees, most credit card services also charge occasional fees for system maintenance and various upgrades. These are spelled out in a processing service’s contract, sometimes in the terms and conditions or in a separate section detailing the total cost of the services. However, some credit card services aren’t transparent about their fees, so businesses should carefully read their contracts before signing up for long-term service. Maintenance fees can easily become a huge part of credit card processing services’ charges and can easily override a fairly good per-transaction rate. Gateway fees are also something to consider. These are monthly charges assessed for using credit card services, but they’re usually very minor at about $20 or less.
The best credit card processing services will provide a detailed breakdown of all of their charges, and may regularly update accounts for growing businesses with lower rates and fees. Businesses should look for services that offer transparent quotes, and if any fees are assessed that weren’t clearly detailed in an initial contract, it’s a major red flag. Overall, credit card processing is very affordable for most businesses, particularly if a large number of transactions are handled per month, but understanding the various fees that come with the ability to take credit and debit cards is an important part of planning for business growth.