It is important to know about your
merchant account fees. To avoid hidden costs and unpleasant surprises later, read each term carefully.
There are four different types of
merchant account fees that vary for each
merchant account. They are namely, Fixed, regular fees are usually monthly and sometimes annual. Fees based on sales generally in the form of a small percentage of the amount of each transaction, plus a fixed cost per transaction.
You may also be assessed a one-time fee for such things as opening/closing/changing a
merchant account, application fees, or cancellation fees. In addition, there are fees for special circumstances such as charge backs, or the use of debit cards or other special cards.
You should also ask whether the rate you have been quoted is the discount rate and whether you'll qualify for that rate. The discount rate is the lowest possible rate that merchants are charged to
accept credit cards. When there is a higher risk of nonpayment, you will be charged a higher rate.
Keep in mind that unfortunately, mail order and telephone order
merchant accounts are considered a greater risk because the buyer and the credit card aren't physically present. For example, most retail businesses are charged less than 2.00% on each transaction. If you are quoted a fee in this range, make sure the
merchant account provider knows that you are a phone or mail order business. You might have to pay a little more because of this.
Finally, ask whether there are any cancellation fees. There are many options in setting up a
merchant account, and there's always the possibility that your needs will change in the future.
