9 Fees That You Should Be Familiar Of When Operating A Merchant Account

These fees are common when you are operating a merchant account: address verification service fee, monthly fee, surcharge, discount rate costs, transaction fees, internet gateway costs, ACH fee, fixed costs, and termination fees.

We all know that there are many benefits a merchant account has in store for online retailers. It is now a handy tool for internet merchant to have a satisfying business processes. But how about the costs of operating one? Here are the most common fees you might encounter to maintain an active merchant account.

Address verification service fee

This is only valid for the retailers that are not swiping their transactions. It provides merchants an address and a zip code lookup to help minimize fraud. It usually ranges at 5 to 10 cents and is sometimes stated together with the transaction fees.

Monthly fee

Regardless if you have made any sales or not in a specific month, this is still charged by the service providers. It can be bad news if you're running a business that is seasonal rather than continuous. It usually around $10 a month, but can be as high as $15 a month.

Surcharge

Surcharges are the additional discount fees that some cards will be charged of and only apply to selected card types. They can be applied on some business cards, reward cards, and some international cards. These fees usually range from 0.5% to 2.5%

Discount rate costs

Widely considered as the most important fee. It can take considerable percentage from your total sales. It is simply defined as the percentage charged upon each sale. This usually range about 2% to 4% in each transaction.

Transaction fees

This is a fee that is is charged to every transaction that has happened. Whether the transaction is approved or not, it is charged on every sale. It is also independent from the income and the size of the sale. This is usually fixed at around .30% in each transaction.

Internet gateway costs

This is only valid if you are using an internet payment gateway and negligible if you're utilizing the software or a terminal. The gateway provider charges this and can sometimes be stated on your merchant account by the processor. It can be as high as $30 a month and sometimes an additional charge can be given.

ACH fee

Also known as the daily batch fee, it is required by some service providers when your present your daily batch and have your profits be transferred to the bank accounts. Ranges about 5 to 10 cents and is not charged if you haven't made any transaction in a specific day.

Fixed costs

This is charged by the provider for mailing an updated monthly statement and full details of all transactions made.

Termination fee

Most merchant account providers feature a cancellation or termination fee if you feel like withdrawing from their services. You should be aware of the cancellation be before completing the application and making sure it has a fixed cost if you ever decide to use it in the future years. Retailers should read the policy and agreement about the cancellation fees.

Before getting a merchant accont, always read the terms and conditions. It is your right to be familiar with these fees and help protect the integrity of your online business.