When shopping for a merchant account there's a lot to consider, but perhaps one of the most important things to consider are the rates. The rates on your merchant account can often affect your bottom line more than you might think, especially if you are in a high risk industry.
There are a number of different rates and charges that accompany a merchant account and it can sometimes get a bit confusing. Below you will find the most common rates, fees and charges that merchant account providers will throw at you.
One time fees
Accountant
Application Fee: This fee is charged upon a successful application. Whilst application fees used to be charged by all providers, they are less common these days. In some cases application fees are charged at the point of the submitted application and may not be refundable.
Gateway/Setup Fee: This is a flat setup fee charged when a new account is created and is usually around USD.00.
Recurring Fees
Monthly Gateway Fee: A fixed monthly fee that covers the use of the gateways processing services. This fee may also include payment cancellations and transaction reporting.
Monthly Statement Fee: A fixed monthly fee that covers general services provided by the merchant account provider. This fee may also be called a service or statement fee.
Transaction Fees
Transaction Fee: This is a flat transaction fee that is applied to each transaction and will usually range between $.30 and $.50, however this will depend on the account provider and the risk involved with your industry.
Discount Rate: A discount rate is a percentage of each transaction, this fee is charged by the credit card company and includes a percentage for the merchant account provider. The discount rate is typically determined by the industry of a merchant and range from 2% up to 10% (for high risk merchants).
Chargeback/Refund Fees:Most merchant account providers charge a fee when a refund or chargeback is made, these will vary however some chargeback fees can be as high as -.
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