While the primary credit card processing fees are typically well-advertised by payment processors, there can be additional or hidden fees that merchants should be aware of. Here’s a breakdown of potential additional credit card processing fees associated with each of the fee structures listed above:
Flat Rate Pricing:
- Monthly fees: Some payment processors may charge a monthly fee for account maintenance or additional services such as reporting tools, virtual terminals, or POS systems.
- PCI compliance fee: Merchants may be charged an annual fee for PCI compliance, which ensures that they are following the required security standards for handling cardholder data.
- Chargeback fees: In case of a disputed transaction or chargeback, merchants may be charged a fee, typically ranging from $15 to $30 per incident.
Interchange Plus Pricing:
- Monthly fees: As with flat rate pricing, there may be monthly fees for account maintenance or additional services.
- PCI compliance fee: Merchants may also incur an annual PCI compliance fee.
- Chargeback fees: Fees may be applied for chargebacks or disputed transactions.
- Setup fee: Some processors may charge a one-time setup fee for establishing the merchant account.
Tiered Pricing:
- Monthly fees, PCI compliance fees, and chargeback fees: These fees are similar to those in flat rate and interchange plus pricing.
- Downgrade fees: If a transaction does not qualify for the lowest tier, it may be subject to downgrade fees, which can significantly increase processing costs.
- Batch fees: Some processors may charge a fee for each batch of transactions submitted for settlement, typically ranging from $0.10 to $0.30 per batch.
Subscription/Membership Pricing:
- Monthly subscription fees: The primary cost associated with this pricing model is the fixed monthly fee, which may vary depending on the plan chosen.
- PCI compliance fees, chargeback fees, and setup fees: These fees may also apply, as with other pricing models.
Surcharging:
While surcharging itself does not involve any additional fees, merchants must be aware of the rules and regulations governing surcharges to avoid potential fines or penalties from the card networks.
Additional or Hidden Credit Card Processing Fees Not Tied to a Specific Pricing Model:
- Early termination fees: If a merchant decides to cancel their contract with a payment processor before the term ends, they may be subject to an early termination fee, which can be hundreds or even thousands of dollars.
- Minimum monthly fees: Some payment processors may require merchants to pay a minimum amount in processing fees each month, regardless of their actual transaction volume. If the merchant’s processing fees do not reach this minimum, they will be charged the difference.
- Gateway fees: If the merchant uses a separate payment gateway, there may be additional fees for gateway setup, monthly usage, or per-transaction fees.
Merchants should carefully review their payment processing agreements and fee schedules to identify and understand all potential credit card processing fees associated with their chosen fee structure. This will help ensure they are aware of the true costs of processing credit card transactions and can make informed decisions when selecting a payment processor.
