Merchant Account Fees (part 1 of 2)

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Whenever a merchant or a business owner is choosing a merchant account provider, looking at and trying to understand the numerous fees is always confusing. Let us try to look and try differentiate these dizzying fees.

• Discount rate makes up the majority of the costs when getting and paying for merchant account service. This is a fixed percentage amount that is deducted from the purchase cost or charged on every transaction. It usually range from 1.49 to 4 percent for every transaction.

• Transaction fees are charged by the processor to process each transaction. It is charged on every transaction, regardless of whether or not the transaction is approved or declined. It’s amount range from 20 to 30 cents.

• PIN Debit transaction fees are only applicable if cards will be swiped and only applies to debit cards. This is a fixed transaction fee and is usually around 70 cents.

• Address Verification Service Transaction Fee (AVS) applies only to merchants who are not swiping cards.  AVS provides address and zip code lookup on the cardholder and reduces the possibility of fraud.

• Daily Batch Fee is charged by some processors when merchants settle daily batch and transfer the settled fund into the merchant’s account. No transactions, no charged.

• Monthly statement fee is charged at the end of each month. It is a fixed fee, regardless of the number of transactions made in a particular month.

• The Internet Gateway Fee only applies if you are using an Internet Payment Gateway. The gateway fee is a monthly fee assessed by the gateway provider and is usually billed directly by the provider.

• Voice authorization fee is only charged when you call in your transaction an 800 number. It is used if the terminal or software the merchant using is not working and the merchant need to perform an authorization.