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Every Credit Card Processor will have a fee. Discount rates can vary on from 1.59% up to 5.0%. The discount rate is not an actual discount.
The term “discount rate” refers to the percentage of your sales that the Payment Processing Service Company charges to offer the ability to accept credit cards.
For example: If you sold $5,000 in Visa sales in Whole month and your discount rate was 2.5% then you would pay $125 in fees to your Credit Card Processor.
Merchant Account Rates vary and are dependent on your
All these factors above will have an effect on what Discount Rates your business will qualify for.
Usually, high-risk business will have higher discount rates (2.5%-5%). A high risk business is one that has:
Two questions you should ask:
In addition, many business owners are not aware that Corporate Cards also are usually charge a higher rate than the “Qualified Rate”, usually 0.15% higher, but can be as high as a full 1%. Fortunately, most businesses get less than 6% of their credit card sales made with Corporate Credit Cards.
Transactions fees are sometimes called IDP transactions. Every payment processing company has at least a transaction fee for debit and usually also for credit card transactions too.
It is becoming more common that any transaction that is made on your point-of-sale terminal will be considered a transaction and a fee will apply, whether it's a debit, credit card, refund, batch close, etc.
Transaction fees can range from 0.05 cents up to 0.50 cents and can be different for each type of transaction, although typical Point-of-Sale Terminal transactions fees are between 0.05 cents to 0.18 cents.
Although, some Payment Processing Companies charge as high as 0.20 cents to 0.35 cents, in which case, you may want to ask for a rate review or search for a new Payment Processing Provider.
Non Point-of-Sale card processing services like IVR, PC, & E-commerce processing transaction fees are usually much higher ranging from 0.35 cents to 0.50 cents.
Transactions fees are sometimes called IDP transactions. Every payment processing company has at least a transaction fee for debit and usually also for credit card transactions too.
It is becoming more common that any transaction that is made on your point-of-sale terminal will be considered a transaction and a fee will apply, whether it's a debit, credit card, refund, batch close, etc.
Transaction fees can range from 0.05 cents up to 0.50 cents and can be different for each type of transaction, although typical Point-of-Sale Terminal transactions fees are between 0.05 cents to 0.18 cents.
Although, some Payment Processing Companies charge as high as 0.20 cents to 0.35 cents, in which case, you may want to ask for a rate review or search for a new Payment Processing Provider.
Non Point-of-Sale card processing services like IVR, PC, & E-commerce processing transaction fees are usually much higher ranging from 0.35 cents to 0.50 cents.
Some debit and credit card processing company will have set-up fees. Set-up fees can range from $10 - $300. Usually the set-up fees are one-time only set-up fees for Visa, MasterCard, Amex, & Interact cards usually around $25 per card. Some companies also charge an initial set-up fee for programming the POS Terminal or a fee for initial training. Set-up fees greatly vary from company to company.
Some companies payment processing companies have an application fee, but not all. This is usually a non-refundable fee, whether your business is approved or not. Applications fees can vary from non-existent to $400.
Again, some payment processing providers have a statement fee, but not all. The average statement fee is usually around $10 or free if you are willing to receive your statement coming to you via e-mail.
Most merchant account providers have a settlement fee. Settlement fees can range from 0.05 cents 5 dollars. The settlement is what sends your funds to your bank account when the batch is complete.
Most payment processing providers have minimum processing fees, usually from $5 - $25. Often there are minimum processing fees for each type of card you intend to have processed. What this means is if you do not do enough business sales to have high enough fees you will still pay a minimum every month.
For example: Say your discount rate is 1.85% on Visa and your business does $1000 worth of sales on Visa that month and your minimum processing fee is $10.
1.75% X 1000 = $17.50 in fees that month on Visa. Therefore, you have cleared your minimum of $10 and you have nothing to worry about.
Now if you take the same rate and minimum, but only made sales of $250 that month on Visa, 1.85% X 250 = $4.62 in fees that month on Visa. Therefore, you did not make you minimum and would be required to make the difference up of $5.38.
Most card processing providers usually have a gateway fee, but usually only for IP POS terminals, PC and E-commerce payment solutions. Gateway fees can range from $5 to $75 a month.
Some payment processing service providers have a monthly added value fee and some do not. This fee usually ranges from $5 - $10 a month.
Most payment processing providers have a chargeback fee. Chargeback fees can range from $10 - $50. A chargeback is when a card holder holds a dispute on a Visa, MasterCard or Amex transaction that came from your business. If the card holder wins the dispute, they will be refunded their money and you will be charged a chargeback fee, a similar fee to bouncing a check.
It is always the merchant burden of proof to prove that the card holder had used or bought the product or services from your business. This is why is so important to check that on credit card purchases that the signature matches the back of the card holders credit card and if it does not to ask for photo ID.
Some card processing service providers have a monthly maintenance fee others do not. If they have it, it is usually a fee that is associated with IVR, PC, & E-commerce payment processing solutions. Some companies have it on POS Terminal solutions too.
Most card processing companies have a help desk/technical support. However, not all are 24/7 and some are better than others. The best thing to do is to get the help desk number and give it a call a few times throughout a day to see what kind of service you would get.
Payment processing providers can vary on this from company to company. Some can have one to you within 24 hours others can take 2-4 weeks before they have a new POS terminal to you. The question you have to ask yourself is how long can your business run without one in your business? Sometimes it is better to pay more for better services.
Most card processing companies usually take at least 2 weeks (sometimes as long as 4-6 weeks) to have your application processed, merchant accounts set-up, point-of-sale terminal programmed and shipped to your business ready to use. However, there are a few payment processing companies that can have one ready in your business in as little as five business days. These are usually private label payment processing companies.
