There are some fees that Credit Card Companies like Visa/MC/AmEx/Discover charge, these are unavoidable, there are called Interchange. However other Merchant Credit Card Processing Fees fees can be greatly decreased or avoided.
Here is a helpful Infographic on the processing fees you will encounter, with a breakdown or unavoidable and avoidable fees.
We highly recommend looking at your Credit Card statement every month, especially for the first 6 months with the new merchant provider, just to make sure nothing funky pops up. Below we provide an account of the merchant processing fees that can avoided, and the ones that can’t.
Interchange –Visa/MC/Disc & AmEx wholesale fees.
AVS – Address Verification System
EBT- Electronic Benefits Transfer
VAF – Voice Authorization
International Cards – International Service or Cross Border Fee
Access Fee – aka NABU, Data Usage, Acquirer Processing Fees
ACH Reject – easily avoidable if merchant has enough funds in bank account
Acquirer Volume – high volume transactions
Chargeback – transaction dispute
Batch Fee – 10 ¢/25¢ per batch
CVC2 – Master Card Fee
Miscellaneous – Visa/MC add tiny fees, not worth fighting for fraction of a cents
Monthly Minimum Fee – merchant has to hit certain amount
Monthly Service Fee – merchant with many transactions shouldn’t have this fee
Statement Fee – Should be less than $5 for paper statement, and $0 for online one
Protection Fee – Different processors give it different name. Meaning stays the same. Don’t pay it
Package Fee – pay it if includes free terminal paper and you use a lot of it, otherwise don’t
PCI Compliance Fee – complete PCI survey to avoid this fee
Annual Fee – also Membership fee. Ask why it is charged before agreeing
Application Fee/Reprogramming Fee/Debit Setup fee – don’t pay it
Which Processing Fees should you get charged?
The answer depends on many things:
average sale amount
the way credit cards are accepted
even type of customers
Rather than picking merchant processor that worked for your cousin, AllRates fee comparison tool lets you see the rates from 5 processors on one screen.
How AllRates calculates merchant credit card processing fees for the comparison:
Credit Card companies charge set wholesale fees that are published, these are called Interchange. In our calculations we take the Interchange plus the unavoidable fees and multiply by merchant’s business type, monthly volume, average ticket, e-commerce versus retail sales percent, and a few follow up questions (depending on business type) that might increase merchant’s processing fees. Based on processing fees gathered from 20+ merchant service providers (adding more providers everyday) AllRates calculates and compares estimated monthly processing fees, shows the discount rates and transaction fees. Keep in mind, since the estimated amounts are calculated based on limited input the eventual processing fee quoted by a Provider may vary. Factors such as credit history, previous credit card processing, chargebacks, and other factors can change the standard processing quote.