Comparing Merchant Services Fees: The Standard and the Bogus - By: Ben Goodman

Depending on the provider, the fee section generally consists of two parts: the processing and transaction fee section, and everything else. Different providers charge differently, and with all the terminologies and abbreviations, beginners may seem overwhelmed by all the information. It is imperative that business owners fully understand this section to have full control over their business.

General Rates and Fees

Processing fees are the fixed percentage that the provider charges for every transaction, regardless of whether it had been approved or declined. A standard merchant account follows the three-tier system. This has a base discount processing rate, a mid-qualified rate and a non-qualified rate. To get the lowest rate - the discount rate - customers should be allowed to physically swipe their cards. Manually entering the information is usually charged the Mid-Qualified Rate or the Non-Qualified rate. The latter rate is charged when the information given is incomplete. Each verification service may cost extra per transaction.

Additional fees can include initial fees which are paid to set up the account. This can include application fees to the software and equipment needed to a setup as well as a gateway setup fee, the amount assigned to use an Internet gateway service to accept online payments.

On top of this, most providers charge a fixed monthly fee. Also called a statement fee, an account fee or a report fee, these include costs for the maintenance of the account. Depending on the provider, fees that range from $10 to $30 may be charged per month, or it may come as an addendum to other costs.

Other Fees

Other merchant services fees may also appear on the bill, including hidden fees that business owners need to look out for.

ACH/Daily Batch Fee

Some providers charge this fee for the daily transfer of funds. This can range from 5 to 50 cents.

Statement fee

This fee is for the monthly delivery of the statement to the business and is mandated by law. $5-10 is the standard amount.

Internet access fee

If the business is processed online, an additional fee of 5 to 10 cents will be charged.

Reprogramming Fee

This fee is for the service of faulty equipment or software.

Retrieval Fee

Retrieval fees refer to the costs relating to a customer disputing a transaction. $25 is the standard amount.

Annual Fee

Some providers also charge an annual fee for the maintenance of the account.

Cancellation Fee

Almost all merchant accounts have a cancellation fee. A fixed amount is usually charged. Some providers will charge the remaining months until the termination of the contract. Merchants should be aware of this.

Hidden and bogus fees can come in different names, and these can sometimes take advantage of beginners in the industry. In an enterprise of more scammers than processors, knowledge is key. Compare and contrast the companies to find the best one.

About the Author

It is important to compare merchant service fees to separate the standard fees from the bogus ones. Learn about the different kinds of fees that are usually charged. Merchant services fees can significantly impact your bottom line.

Article Directory Source: http://www.articlerich.com/profile/Ben-Goodman/150478

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