It’s crucial as a merchant to understand the terms and fees associated with your merchant account. When you decide to accept credit cards, it’s easy to focus just on discount rate and transaction fees. Most agents know this and will quote these numbers near cost in an effort to make up the difference with other merchant account fees on the back end.
Here is a list of things to ask for when seeking a merchant account:
This fee is associated when applying for a merchant account to accept credit cards. This is not as common in the credit card space as it use to be , but something to be aware of. There should be no application fees when you apply.
Authorization Fees occur when you authorize a transaction or hold the funds at the card issuer’s bank level.
AVS (Address Verification Service)
This fee is a security check to help prevent stolen cards or fraudulent transactions from hitting your merchant account. The simplest example of this would be when you purchase gas at the pump and are required to enter your billing zip code to verify.
A batch header fee occurs when the daily credit card transactions are batched to the bank at the end of the day.
Early Termination Fee (ETF)
Early Termination Fees or Cancellation Fees are assessed by the bank when you close the account before your contract expires. They work very similar to cell phone cancellation fees and typically run a few hundred dollars depending on how far along you are in the credit card processing agreement.
Chargeback Fees are assessed when a customer disputes a charge with their card issuer. These fees apply even if you win the chargeback dispute and cover the operational costs of dealing with the issue at the merchant bank level.
Sometimes banks will charge a reprogramming fee to switch over existing hardware or software to their platform. Reprogramming fees can range from 10-25 dollars per credit card terminal depending on the solution or bank. Total-Apps does not have any reprogramming fees.
Sometimes the merchant will need to call in to a toll free number to obtain a credit card authorization for a transaction. This is common with businesses that are in the field, IE mobile mechanics, car detailers, etc.. Banks charge a fee for the person to person transaction.
There are more fees then listed above, but this should be a good start for you. Total-Apps is committed to not only helping you keep your merchant account fees low, but helping your business as well. To discuss more, please inquire today and a merchant account specialist will be in touch shortly.