• Monthly Minimum Fee is based on the merchant transaction and discount rate fees from the card sales every month. This is not an extra fee but a minimum amount that the processor or merchant account provider needs to have in fees.
• Surcharge fee can be under a different name like partially-qualified fees or non-qualified fees. These fees are additional discount rates that some cards are charged and may apply only on certain card types.
• Application or set up fee is only charged one-time. This is only charged when the account is setup. There are some merchant service providers who do not charge this fee anymore.
• Programming/Reprogramming fees apply to retail merchants who have changed from one provider to another. For reprogramming, it is applied whenever there is a need to reprogram a piece of existing equipment software.
• Annual fee are sometimes charged by the providers.
• Chargebacks and retrieval fees are related to customer or issuing bank disputing a transaction that was processed. A large number of chargebacks can cause your merchant account to be dropped totally and leave you in a bind when trying to get another merchant account for your business. As a merchant, it is important that a merchant take the necessary steps to reduce and potentially eliminate the instances of chargebacks.
• Cancellation fee is significant cost in setting up and maintaining a merchant account for a business and this fee helps recoup some of those losses should a merchant cancel, especially in the beginning.
• There are hidden or junk fees that merchants are not aware of. Some of the hidden fee is for a merchant account provider to offer a teaser rate that is extremely low, but the teaser rate is just temporary and goes up after a few moths while the application is still in process.
Knowing and understanding the merchant account rates and fees will enable the merchant to identify the best service or account provider. It is also important to know the different fees, so that you know where you’re hard earned money go to.