The fees associated with payment processing can be quite varied and daunting at times. However, it is important that you take the time to review them before signing up to a payment processor – otherwise you can be stuck in a contract that is less than favorable.
7 Things To Know About Your Merchant Account
When choosing a payment processor, it’s important you fully evaluate their rates. Different payment processors suit different merchants – the questions below will help you find one suited to your needs.
What are the discount rates? Discount rates are the percentage of transactions that the processor charges you in order to use their service. Rates will vary between processors and will also depend on your average or expected processing volume.
What are the transaction rates? The majority of processors will also charge a set fee for each transaction. Usually this between $0.30 and $0.50. There may also be fees for refunds and declined transactions.
Is there are fee for chargebacks? Most processors will charge a fee ranging from $30 – $50 for chargebacks.
Is there an application fee? Some payment processors will charge an application fee of up to $300 and this is non-refundable – even if your application is declined.
Are there any ongoing fees? Ongoing fees usually take the form of an ongoing fee, a statement fee or a gateway fee.
Is there a settlement fee? A settlement fee occurs when funds are sent to your bank account and can range from anywhere between $0.05 and $5!
Are there any processing volume limits or minimum processing fees? A minimum processing fee occurs when you do not process enough transactions via a particular method (such as mastercard or Visa). Processing volume limits are limits to the total amount of transactions your business can process – exceeding these limits can often result in suspension of your account and withholding of funds.
Make sure you take the time to review as many payment processors as possible before deciding on one – the best payment processors for your business may not be the best for another.
You should also consider additional requirements you may have, such as recurring billing and fraud prevention tools, and the added costs these may have when making your decision.