Credit Card Processing Fees

Credit Card Processing Fees

Who are the parties involved in a credit card purchase? Where Do They Fit Into a Deal? Types of Costs and Credit Card Processing Fees. Prior to you can start to understand processing costs, you need to know about the parties included with credit card processing fees. Now that we’ve covered all the parties included, let’s talk about the various types of costs in any given credit card purchase. In addition to transactional costs, you may be demanded some flat charges as well. All of the above costs fall into one of two classifications: wholesale costs, and margins. Your wholesale charges are specifically like they sound- the wholesale cost of your sales transactions.

These costs are established by the credit card issuing financial institution and the credit card associations. Markup costs are various from processor to processor and are what you should be contrasting when preparing to open a new merchant account. Each card association publishes their interchange and assessment costs online. These are costs paid to the Payment Card Industry, either for noncompliance or compliance. In the case of noncompliance, you have to pay because your business is not upholding PCI standards, which could cost you even more money in the long run. These are costs that are charged each month, usually for the purpose of covering call center costs. Ironically, most of the phone calls that come in are the result of mistakes made by the merchant account providers, making them the cause of their own costs. These are costs charged to merchants who do not reach a certain transaction total for the month or year. These are charges charged to cover printing and mailing costs for credit card statements. Some merchants bypass these costs by using electronic bill statements, but others pay as much as $20 a month for miscellaneous processing costs. IRS Report Costs: These are costs that merchant account providers charge in exchange for reporting transaction information to the IRS. The card networks charge certain non-negotiable costs that are passed through to the merchant, such as the FANF.Incidental Costs. If you don’t have enough funds in your bank account to cover your merchant account expenses, you will be assessed a NSF cost. Rather all transaction cost the exact same portion and transaction cost, regardless of the wholesale cost. Learn more about credit card processing fees here.

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