Credit Card Processing Fees

Merchant Credit Card Processing Fees Basics:

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.

Avoidable and Unavoidable Merchant Credit Card processing fees
Avoidable and Unavoidable Merchant Credit Card processing 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.

Unavoidable Fees:

  • 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

Avoidable Fees:

  • 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:

  • merchant size
  • average sale amount
  • business type
  • the way credit cards are accepted
  • fraud probability
  • 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.

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Actual results may vary greatly from the figures shown on the next screen. The final rates and fees will depend on additional information you supply and determined by the Processor.

The comparison results are not offers by the Processors.

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