Introduction
One of the things that you will know about the merchant account is that, there is a universal merchant account fee, which comprises of various charges acquired by businesses for processing the transactions done through the card. No matter what the pricing model is – whether flat, tiered, interchange based, – these are some such fees that remains consistent across distinct merchant service providers. You can also check here, high risk merchant account fees & broaden your horizons on the same. Also, you should know that there are different components of universal merchant account fees. The first and the foremost is the authorization fee.
Different Fees of Merchant Account
The first and the foremost fee of merchant account is the authorization fee, it is a fee that validates the transaction requests by verification of the availability of the funds and credits. It is a fee that is charged on per-transaction basis, no matter what the approval status is & it is one of the crucial steps in the transaction process. The next kind of fee of fee is the transaction fee, in which all the charges are incurred for every transaction processed through a merchant account. And, it also depends on the pricing model, transactional fee can vary- it can be either a fixed amount or a percentage of transaction value.
Assessment Fee
Assessment fee is something that is levied by card associations like Visa or MasterCard to cover the network operations & also the fraud prevention expenses. Although they are small, they have a crucial role in managing or handling the card payment system. Then, comes the scheduled fees. Different kinds of flat-rate fees contribute to the functional costs of merchant’s accounts which also includes, monthly or annual fee, monthly minimum fee, processing commitment fee, statement fee, payment gateway fee. Then, there is also a different kind of transaction fee.
Incidental Fees of Merchant Account
Situational merchant account fees or incidental fees are some of the charges that comes in specific scenes which is defined or given in merchant service provider contracts. It can also happen that to some these fees may look very complex, but the truth to be told is that, they can become unmanageable if not handled properly and it can also quickly add up. Some of the important kinds of incidental fees that can arise are – PIN debit transaction fee, address verification system fee, retrieval request fee, chargeback fee, PCI non-validation fee, & batch fee.
Red Flags in Merchant Fee
Some of the important warning signals in a merchant fee are – hidden charges, sudden increase in charges, unclear assessment fee, misleading terminology, excessive fine print, fluctuating discount rates. Besides all of that, the average merchant processing fee ranges from 1.5% to 3.5% on every transactions total amount.