Merchant account services providers have several kinds of fees to be paid. Some are paid periodically while others are charged on a per-item or percentage basis. Some of the fees are set by merchant account providers. Most of the per-item and percentage fees are pass passed on by the merchant account provider to the bank issuing the credit card based on interchange fees set by Visa, Discover and MasterCard. Interchange fees depend on the type of card and the conditions of the transaction. A transaction made by swiping a card through a credit card terminal has a different category than a transaction that is keyed in manually.
Kinds of Merchant Account Fees
- Transaction Fee – this fee is charged when the authorization is accepted. It is applicable only to an authorization what is accepted without error.
- Statement Fee – This is a monthly fees associated with the monthly statement that is sent by the merchant at the end of every monthly processing cycle. The monthly statement will show how much processing was done by the merchant within the month covered by the statement and what fees were incurred as a result. This fee is a general overhead of the provider and cannot be waived.
- Monthly Minimum Fee – This is to ensure that merchants pay a minimum amount in fees every month to cover costs from the provider to maintain the account.
- Batch Fee – When a merchant settles his terminal, it is called “batching.” Settling a terminal means the merchant sends his completed transactions for the day to his acquiring bank for payment. A batch has to be closed every twenty-four hours or a higher rate will be assessed by Visa, Discover or MasterCard.
- Customer Service Fee – This is also called a maintenance fee and can be charged by some providers to pay for customer service cost.
- Annual Fee – Some merchant account service providers charged an annual fee to pay for the cost of maintaining the merchant’s account. This fee is paid annually or quarterly.
- Early Termination Fee – If the merchant ends the contract before the term of the contract, a termination fees is charged by some providers.
- Chargeback fee – This fee is charged if the merchant operates in an illegal or risky manner resulting to many chargebacks. It is passed on to the merchant, otherwise the provider pays all the cost to make the cardholder whole.
