This fee is a flat charge on each transaction that the acquiring bank levies for processing the transaction. This fee varies based on the acquiring bank and is disclosed upfront. Usually this is a simple transaction fee for each charge, but many other fees may also appear in a merchant contract. These potential fees, such as refund fees, chargeback fees, retrieval fees and fraud scrubbing fees, are described here.
- Application fees may be assessed for the processing of your application.
- Cancellation/termination fees may be assessed for early termination of a contract.
- Chargeback fees may be applied to chargebacks; these are assessed in addition to the lost revenue from the transaction itself.
- Fraud scrubbing fees may be incurred if the processor flags transactions for investigation and/or manual approval. This is an extra layer of security that helps prevent chargebacks and fraudulent transactions from slipping through the system.
- Payment gateway fees may be assessed for use of the merchant provider’s gateway or a third-party gateway.
- PCI non-validation fees are assessed if your payment processing system is not PCI-compliant, or if your system isn’t providing PCI verification. PCI compliance is something you want but not to avoid fees. PCI-compliant processing reduces the risk of fraud.
- Processing minimum fees are assessed if your merchant account contract includes a provision for processing a certain minimum level per month.
- Refund fees may be assessed for transactions involving returns or other situations that result in a credit card refund.
- Retrieval fees may be assessed if your customer doesn’t recognize your charge on his/her credit statement and asks the bank to investigate.
- Setup fees may be assessed for setting up your payment processing system — hardware, software, integration, etc.
The fees noted above are not a complete list. Reading your merchant account contract carefully is very important to make sure all fees are explained clearly. This is the only way to avoid unpleasant (and possibly costly) surprises after your merchant account is up and running.
Most of these fees are negotiable, something else to keep in mind. The greater your transaction volume and the stronger your creditworthiness, the better position you are in to negotiate fees down or have them eliminated entirely.
We will help you evaluate an offer (or competitive offers) to identify charges and negotiate whenever possible.
Reputable processors — such as the ones we work with — are transparent in detailing their fees. This is a very important quality to look for when selecting a payment processing solution, because your processor will be working with you regularly on important financial issues, making a high level of trust essential.
By improving your operations in certain ways, some of these fees can be avoided even if they are written into your contract. For instance, retrieval fees are often mitigated simply by making sure the credit card descriptions of your transactions are crystal clear. Similarly, refunds (and refund fees) are often reduced by clearly explaining your return/refund policy and/or training your customer service team to explore other remedies to potential refund situations.
If you would like to discuss your transaction fees and look at new options for payment processing, please contact us now for a high-level review.