Typical Fees Associated with Your Merchant Account
There are many different types of fees that are associated with merchant accounts. Some merchant accounts charge an annual fee each year which is a yearly flat rate fee. Chargeback fees are also another type of fee that you can run into. These are fees that are incurred when a customers issues a chargeback from the merchant. Another type of fee that might be encountered is a transaction fee, which is incurred with every transaction that goes through the merchant account. Besides the transaction fee if the customer uses their pin during a purchase there is a PIN Debit charge fee. Instead of being charged an annual fee some merchant accounts charge a monthly fee instead.
When you first set-up your merchant account there might be one-time set-up fees that will be charged. Besides monthly fees there are also monthly minimum fees, which are usually based on the monthly processing volume. Also if you don’t hit the minimum monthly processing volume there will be additional charges on top of the monthly process fee. There are also hardware and/or software fees, which can be a one time fee for the hardware and/or software unless you decide to lease the hardware and/or software. There are some downfalls to leasing the software although it is cheaper monthly fee in the long run the monthly lease fee with cost more than if the hardware and/or software was purchased outright. Also if a longer lease is obtained and your business goes under before the lease is up you on the hook for the for the monthly lease fee regardless.
Besides your normal transaction fee there is also a discount rate fee which is basically a fixed percentage amount that is deducted from the purchase cost that ranges from 1.5% to 3%. Gateway access fees are monthly fees are charged in order to access different secure gateway providers such as Verisign and Authorize.net. Also some companies will charge a cancellation fee which can vary from anywhere from $50 to $500 or more depending on how long of a contract was signed. You can also encounter over limit fees which are fees that are charged if you go over the monthly processing volume that is set in the merchant process agreement. There is also a statement fee which is a flat monthly fee charged in order to provide you with a detailed statement that lists all the transactions processed. Sometimes if there is large volume of transactions this fee will be waived by the merchant account provider.
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