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Accepting credit cards is a crucial way to increase your revenue and help you attract more customers, but the inevitable fees can also cut into your sales to the point where it’s difficult for your business to make a profit. Not all merchant accounts are created equal, though. The right processor will help you find ways to lower your fees while providing transparency about what you’re being charged.
At Merchant Service Group LLC we believe it’s vital for you to understand your credit card processing fees. Here are a few key terms to help you understand what fees you’re being charged and why.
Interchange fees are the percentage of the transaction charged by the credit card company (Visa, Mastercard, etc) to your business every time you accept a credit or debit card. The amount of this fee depends on many factors and varies by card type, with debit cards charging the lowest rates and rewards and business credit cards charging some of the highest.
Many processors will simplify the pricing model and charge your business a flat rate for every credit card transaction. The processor is still covering the interchange fee, but instead of passing that rate to you, they keep your rates the same no matter what type of card you accept.
A flat rate set-up is more straightforward and easy for you to see exactly what you’re being charged, but overall, you may end up paying more than you would under interchange plus. That all depends on the rate your processor sets for your account and what kind of cards you typically accept.
Your merchant account may also come with various monthly and one-time fees that are standard with most accounts. Some processors may cover these fees for you under a flat rate set up.
· Monthly fee: This is set by your agent or processor. Some may charge a low monthly fee while others may charge a higher fee as a way to cover other fees and simplify your charges.
· Chargeback fee: This is one fee that very few merchants can avoid paying when the situation arises. Chargebacks are costly expenses to businesses and processors, with an additional charge of about $25 every time one is filed, so it’s best to take steps to prevent them before they occur.
· PCI Compliance: This fee is charged to businesses who have not registered through PCI to show that their terminal or PC connection is secure. Unsecured connections leave processors and customers at a greater risk for stolen information, which is why this fee cannot be removed until your business becomes PCI Compliant.
Understanding your fees is the first step to building a stronger business. With our innovative technology, Merchant Service Group LLC can lower your fees, and our expert technical and boarding teams can answer any questions you may have about your application, fees, or other account information.