Common Charges Involved in Credit Card Machine Payment Processing

The Common Charges Involved in Credit Card Machine Payment Processing

In an age where almost every shopper walks around with plastic money, credit card processing has become an invaluable asset to businesses. Stores that permit customers to swipe their cards on a credit card machine or provide their details online are growing their market share by boosting sales. Credit card processing allows retailers and other entrepreneurs to speed up the shopping experience because customers don’t have to wait for prolonged periods to pay for purchases. Before you think about the right merchant bank credit card to use or the machine to buy, find out the different fees that these processing services come with.

Who’s Involved

To understand what all the various fees are for, you must know who the players are when getting credit card processing. Four entities are involved in the process; the customer, the merchant who receives payment, the issuing bank that issued the card, and the acquiring bank, which is the one the merchant uses for the processing. The processing fee percentage varies from one merchant service to another but knowing the basics will help you make an informed decision and avoid getting scammed when getting a credit card machine.

Interchange Fee 

For every transaction that occurs, a fee is charged, and this is the interchange that the merchant pays to the card-issuing bank. The rate of this fee is not standard as it will depend on what type of card you are using; it may be debit, credit, or a rewards card. Also, the kind of transaction a customer is conducting will determine the rate of the interchange fee, so will the type of transaction. A purchase made on the phone will not have the same fee as one made at a physical store or online. Purchases made in-store tend to carry a low interchange fee. The type of business you run may also influence the interchange fee of your merchant bank credit card. Enterprises that have a higher risk of chargebacks will trigger higher rates.

Monthly Minimum Fee

Merchants must pay a minimum fee to the processing company issuing the credit card machine. A retailer that doesn’t meet this minimum has to pay the difference. This fee is one of the aspects that dictate the processing company that is most suitable for your needs.

Some merchant service providers have fees for gateway access. You may also have to pay termination fees when you need to end a contract. All these rates differ, so ask about them beforehand.


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