Accepting credit cards is vital for today’s business owner. Consumers are going cashless, and businesses need to accept their preferred method of payment to stay competitive. At a glance, merchant fees for credit cards can be confusing. You may not even know what you’re paying for with your merchant service provider. So what kinds of fees are there?
Transactional fees are charges that deal with transactions you run at your business. These are interchange rates and a cents per transaction fee. Because these fees are set by the card brands, they’re basically fees for accepting a brand’s card. You’ll see interchange expressed as a percentage, plus a few cents.
Interchange rates depend on the card. Debit cards have the lowest rates and business credit cards have the highest. Some credit card processors charge a markup on top of interchange, so you’ll end up paying more in the long run. Keep an eye out for these extra markups.
Recurring fees can be anything from a PCI compliance fee to an IRS report fee and everything between. These are usually determined by the credit card processor or merchant service provider. These are extra fees the company adds on top of your transactional fees, like annual fees or processing minimum fees. If you’re leasing a terminal, you may also be charged a fee every month. Keep an eye out for these line items. Not every merchant service company charges the same recurring fees. Fattmerchant members never pay extra fees for processing.
One-off fees are fees your credit card processor charges for things like setting up your merchant account. Another example is an early termination fee, the fee you pay for ending a contract early. You may also have to pay a fee for setting up payment gateways if you run an online store. Chargeback fees, while avoidable, can also be an extra fee added onto your statement. To avoid some of these fees, ask upfront about set-up costs and cancellation fees. By going with a no-contract processor like Fattmerchant, you can also eliminate many of these fees.
How Can I Avoid These Fees?
Credit card processors have a reputation for adding on mystery fees. Merchants often end up not knowing what they’re actually paying for. You might be able to negotiate some fees with your processor, but transactional fees are set in stone.
Finding a merchant services provider with transparent pricing puts money back into your pocket that would otherwise go to merchant fees for credit cards. Fattmerchant’s transparent pricing means our members know exactly what they’re paying for and why. Plus, there are no contracts. You pay a flat monthly fee and get direct access to the cost of interchange. While merchant fees for credit cards might look like a necessary evil, you can avoid them with the right processor!
Want to learn more about credit card processing? Learn more about how it works.