PROCESSING RATES AND FEES

MERCHANT PROCESSING Rates and Fees

Merchant processing has a variety of fees, some periodic, others charged on a per-transaction or percentage basis. Other fees are set by the merchant account provider, but the majority of the per-item and percentage fees are passed through the merchant account provider to the credit card’s issuing bank according to a schedule of rates called interchange fees. Which are set by Visa, Discover, MasterCard and American Express. Interchange fees vary depending on the type of card and the circumstances of the transaction. Example, if a transaction is made by swiping a card through a credit card terminal, it will be in a different than if it were keyed in manually.

Rates and Fees Explained

Merchant processing has a variety of fees, some periodic, others charged on a per-transaction or percentage basis. Other fees are set by the merchant account provider, but the majority of the per-item and percentage fees are passed through the merchant account provider to the credit card’s issuing bank according to a schedule of rates called interchange fees. Which are set by Visa, Discover, MasterCard and American Express. Interchange fees vary depending on the type of card and the circumstances of the transaction. Example, if a transaction is made by swiping a card through a credit card terminal, it will be in a different than if it were keyed in manually.

Discount Rates

The discount rate comprises a number of assessments, dues, fees, and network charges, plus  mark-ups the merchant is required to pay for accepting credit and debit cards.  The largest of which by far is the interchange fee.  Individual ISO/MSP has real costs in addition to the wholesale interchange fees, and creates profit by adding a mark-up to all the fees mentioned. There are a number of price models ISO/MSP’s used to bill merchants for the services rendered. Here are the more popular rate pricing models

tiered rate pricing

This is a common pricing model for very low and very high average tickets. Some providers offer merchant account services priced on an cost plus basis. These accounts are based on the “interchange” tables published by both Visa ]and MasterCard. This type of pricing creates a discount rate by adding interchange rates plus a percentage and authorization fees.

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