Understanding Your Credit Card Processing Fees

Credit card processing fees can be a little complex to businesses who aren’t accustomed to how they work. Even among those who have been around the block a time or two with various payment processors, the fees can appear somewhat foreign and mysterious.

No merchant account is the same. You may even have a variety of fees showing up on your statement from your processor. It’s important to make sure you understand these fees and that you work with a transparent processor that isn’t attempting to slip hidden fees into the mix or billing you for things they shouldn’t be.

Wholesale Fees vs. Markup Fees

Many payment processors do poor jobs of explaining these fees. Wholesale fees go to one of two places:

1. Banks that issue credit cards, in the form of interchange fees.

2. Credit card associations, in the form of card association fees.

These fees are fixed fees, meaning they will be the same with every credit card or payment processor, and are non-negotiable.

Markup fees are different. These fees go to a number of places, including:

• Credit card payment processors

• Payment gateways

• Add-on equipment providers

• Software providers

These fees are variable fees and change from one credit card payment processor to the next. These fees are negotiable.

Below, you will find a variety of credit card processing fees that may show up on your statement each month. Note: you may not see each of these fees on your monthly statement, as some of them vary by processor.

Transactional Fees

These are “per transaction” fees that show up on your statements. They include the following:

• Interchange and assessment fees that go directly to the credit card company

• Processor’s markup fees

** Card association fees are a side note for all fee types as they may be transactional, scheduled, or incidental.

Scheduled Fees

Scheduled fees are fees that are part of the markup fees your payment processors and other services charge. The fees listed below may be included in your scheduled fees.

• PCI compliance fees

• Equipment fees charged for payment gateways, POS software, terminals, etc

• IRS report fee

• Monthly and/or annual fees

• Statement or online reporting fees

These fees are typically recurring fees, either monthly or annually, and can make a huge difference in your overall costs associated with payment processing. Make sure you get the facts about all of them so you can make apples-to-apples comparisonsbefore choosing your payment processing partner.

Incidental Fees

These are fees that aren’t part of the markup, such as:

• Application or setup fees

• Batch fees

• AVS fees. If you use an AVS (address verification system) you may have surcharges “per transaction” associated with the use of this system when taking online, mail, or phone orders. Make sure you’re aware of how frequently you receive these types of orders and what the fees are with your service provider.

• PCI non-compliance fees

• NSF (non-sufficient funds) fees

• Chargeback fees

• Early termination or cancellation fees

Some of these fees are one-time fees while others are per-incidence fees. Some of these fees you’ll never need to pay, if all goes well. Others, you must pay more frequently.

Zenti Services understands how confusing your statement can be. We go out of our way to offer complete and total transparency about the fees you see on your statement, so you can choose our services with confidence.

Don’t let confusion about fees stop you from getting the service you need to offer the convenience of credit card payments, debit card payments, and even the ability to pay with checks to your customers. Contact Zenti Services today to learn more about the transparent way we do business with free equipment and monthly agreements (and no long-term contracts), and what it means for you as a merchant.