Merchant Services

Merchant Account Fees To Business Owners
By Debbie Dragon

As a business owner, when you set up a merchant account to
enable your customers the ability to pay for your products or
services using credit cards (or debit cards with a Visa or
Mastercard Logo), you will have some fees associated with the
credit card transactions.

The specific fee amounts that you pay will depend on the
merchant account provider you select to provide your credit card
processing service; however, there is a list of typical fees
that the majority of providers charge business owners in
exchange for the ability to accept credit as payment.

Discount Rates

Visa and MasterCard have what is called “interchange” rates.
They range in price- so in order to make it easier, the merchant
providers created three categories.

Qualified Discount Rate – a percentage is paid from each dollar
charged.
Mid-Qualified Rate – does not apply to merchants that manually
enter transactions.
Non-Qualified Rate – added to the qualified rate n certain
transactions. Also get billed this higher rate if you don’t use
address verification service (AVS) when you manually enter
transactions.

Other fees many merchant account providers charge their
business customers include, but are not limited to the
following:

Reward Cards- most merchant providers charge higher rates if
the consumer pays using a reward card.

Transaction Fees- a specific, flat rate that is paid on every
sale processed through the credit card processor. (Sometimes
the transaction fee is called the interchange fee, authorization
fee, or per inquiry fee).

Address Verification Service (AVS)- merchant account providers
charge a small fee for the validation service to ensure that the
billing address provided in the online checkout process matches
the issuing bank’s records. Not using this service will result
in hefty charges on the processing of the card for that sale.

Batch Fees- most merchant account providers require that
customers close out their transactions a minimum of one time
each day. The batch fee pays for expenses for the gateway or
software that accesses the credit card processing network. If
you don’t have transactions to process, there is no batch fee to
pay.

Monthly Statement or Customer Service Fee – most merchant
account providers charge a monthly fee in order to cover their
monthly costs of operation (paying their customer service team
for example).

Monthly Minimum Fee- some merchant account providers require
you process a minimum amounts of sales per month, or you pay a
monthly minimum. Monthly minimums tend to range between $15 and
$40 per month.

Gateway Fees- for some merchant accounts, there are fees for
internet and mail order merchants to use an internet gateway
service such as Authorize.net, although some merchant providers
will cover this fee on their customer’s behalf as part of the
package deal. If you are solely an internet business, you’ll
want to look for an internet merchant account that includes the
gateway service as part of the package.

Annual Fees- often charged by merchant account providers-
particularly the merchant account providers that offer free
terminal equipment. There are numerous merchant account
providers that do not charge an annual fee, so you may want to
shop around if the first few you look at require an annual fee.
Sometimes it would be cheaper to purchase the equipment than to
pay an ongoing annual fee.

Cancellation/Termination Fees- Most merchant accounts require a
contract agreement of one or two years and if you cancel early,
you are likely to be charged a termination fee.

Chargeback/Retrieval Fees- When a customer requests a refund
(or the customer’s credit card issuer requests a refund),
merchant account providers typically charge a “chargeback” fee.

About the Author: This article has been provided courtesy of
Creditor Web, http://www.creditorweb.com .

Source: http://www.isnare.com