Common Fees For Merchant Accounts

Most people know that merchant accounts are actually credit card processing services for businesses, but few know all of the different fees associated with them. While each merchant accounts provider is different, the following fees are common.

Credit Card Terminal Fee

A credit card terminal (or credit card processing machine) is the equipment box that allows a business owner to swipe or key in a customer's credit card information for approval. The credit card terminal most always also accepts debit cards, gift cards, and provides check verification.

This valuable piece of equipment isn't always cheap, depending on the different features you want in your merchant accounts equipment. If you can't afford to purchase a credit card terminal, most merchant accounts providers will lease you one for a monthly fee.

This monthly rental fee can be great for startup businesses that don't have the funds to outright purchase this expensive piece of equipment. When leasing a credit card terminal from a merchant accounts provider, find out how much the monthly payment will be and if you are “leasing to own” or just leasing. Make sure you get all of the leasing information in writing, including who pays for repairs, the payment amount, the terms of the lease, and anything else of concern.

Authorization Fee

Merchant accounts providers charge an authorization fee every time a credit card number is sent for authorization. Usually less than .50 cents per transaction, the authorization fee is usually charged, even for declined transactions. Find out the terms and amount of the authorization fee when comparing merchant accounts providers.

Statement Fee

Many merchant accounts providers charge a monthly flat statement fee, usually of $10.00 or less, for the monthly statement of activity they send you. When seeking merchant accounts, keep in mind that some merchant accounts providers have stopped charging a statement fee as a competitive way to attract new businesses.

Monthly Minimum Fee

Charged to cover maintenance expenses and minimal profits to the merchant accounts provider, the monthly minimum fee ensures the merchant accounts provider makes a minimum amount from the business. If the monthly charges do not meet the monthly minimum set by the merchant accounts provider (usually around $25.00), the business is charged the monthly minimum fee.

Batch Or Header Fee

Also known as a header fee, a batch fee is charged when the credit card terminal is settled and closed out at the end of every day to “balance the drawer” and total up the amount of credit card purchases made that day. Every time a “batch” is processed, a batch fee is charged. It must be done every 24 hours or a higher batch fee is assessed.

More Fees

In addition to the above fees, there are annual fees, customer service fees, fees for keying in a credit card transaction instead of swiping it and more.

The best way to avoid fees is knowing what fees you are subject to in the first place from your merchant accounts provider. If you know what to avoid, you can, making your merchant accounts even more profitable for your business.