Merchant Credit Card Services: Merchant Account Fees

The two main types of merchant credit card services are Interchange plus and Tiered pricing. In order to understand these two types of pricing, you must first understand the merchant account fee terms listed below:

• Interchange reimbursement fees
• Merchant discount
• Transaction fees
• Authorization fees
• Flat fees
• Percentage fees

Interchange Reimbursement Fees

Interchange reimbursement fees are the wholesale merchant account rates charged by the major credit card companies for many types of credit card transactions. These interchange reimbursement fees are usually published bi-annually in April and October. There are literally hundreds of different interchange reimbursement fee categories among the three major credit cards.

Merchant Discount

The merchant discount is the mark up from the interchange rate to the amount you are charged to be able to accept credit cards. When you compare quotes from different merchant count providers, you are comparing the merchant discount.

Transaction Fees For Merchant Credit Card Services

You are charged a fee each time you, the merchant, perform any kind of transactions. These transactions included refunding a credit card order or clearing a batch as well as charging a customer's card.

Authorization Fees

Authorization fees are often confused with other transaction fees. Transaction fees as stated in the previous section, are charged on all transactions. An authorization fee is charged when you the merchant, receives an authorization response on a customer's card.

Flat Fees

Flat fees are charges to your merchant account without regard to transaction activity or your processing volume. The charges for your monthly statement and contract cancellation fees are examples of flat fees.

Percentage Fees

The percentage fees have a large impact on your processing costs. A percentage fee is a percentage of the credit card transaction. These fees are applied differently with Tiered and Interchange Plus merchant accounts.

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