Merchant Account Fees: What to Expect to Pay
A merchant account is a type of bank account that enables online retailers to accept and process credit card payments through their website. Essentially, a merchant account is the intermediary between your business bank account and your customers’ credit card issuers that ensure you get paid. Merchant accounts have a variety of fees, which can vary depending on the bank or financial institution that issues it. Here is a brief overview of the merchant account fees and charges you may be expected to pay.
Contested Charges – Some merchant account providers take a small percentage of each transaction to cover contested charges that may arise, such as charge-backs and:
Excess Usage Fees – Certain merchant account providers impose excess usage fees if you exceed the number of processed transactions allowed under your contract and fixed monthly fee.
Internet Discount Fee – This fee is a fixed percentage – typically two or three percent – that is charged on every transaction processed on the site.
Monthly Fees – All merchant account providers charge a monthly fee (usually a flat fee) for their services. The cost can range anywhere from $25 to well over $100 depending on the provider and the terms of your contract.
Monthly Minimums – Some fees charged by merchant account providers are levied on monthly minimums, such as a minimum of total monthly transactions.
Setup Fees – Setup fees are standard when it comes to merchant accounts and are usually entail any software and hardware required, installation fees, programming costs and other setup charges that may be exclusive to a particular merchant account provider.
Transaction Fees – Most merchant account providers have fixed transaction fees which cost anywhere between 25 and 75 cents of each transaction.
In addition to such costs, expect to pay for any additional services you sign up for aside from processing online payments. For example, some merchant account providers offer shopping cart services, order verification, fraud protection, and more. Be sure to discuss all fees with any merchant account provider you are considering using and most importantly, remember that all fees can be negotiated!
