Credit card processing fee- paying unaware
It is essential and mandatory to closely monitor the credit card processing fee. Even after meticulous watch and ward of credit card statement, still there are chances of paying no obvious fee, unknowingly. This article covers such loop holes to educate credit card holders.
Each transaction is chargeable which is called processing fee. When a customer’s card is processed, a transaction fee and a discount rate are applicable to pay to the merchant account provider. But, unfortunately, these fee are not refunded when a transaction is reversed. Merchant account fee that is lost on the reverse transaction may not be considered if you operate good business.
To quote an example of hypothetical retail store loses $11 per month on refunds on ten credit cards which includes merchant account fee 1.7% and transaction fee $0.25%. In addition, common and non-qualified surcharges would make the loss more greater.
You will be surprised to notice hoe losses due to credit card refunds have been affecting your business.
As qualified charges are deducted from credit card transactions for each month through out the year, whereas, surcharges assessed at the end of month in a lump sum. According to many processors, surcharges are a separate fee and charged different times in a month. The lump sum deducted is shown as large fee on the merchant processing statement. Many merchants are of under impression that the lump sum charge is total processing fee but unlikely it is only a portion of total charges.
In fact, total credit card processing charges can be realized by adding fee to the downgrades at the end of month and surcharges to the qualified discount charges. However, these discount charges are deducted through out the month.
Each provider and processor operate different fee structure and layout hence it is generically difficult to read and explain merchant account statements. Whereas merchant service provider gives you assistance in case you do no not understand the merchant account statement.
Generally users are surcharged for monthly minimum payment whereas merchant accounts are charged with monthly minimum fee which often creates confusion. A monthly fee that is charged on the merchant accounts is that a processor has to collect from a merchant every month. For example, a surcharge of $10 will be assessed if processing fee for a particular month is $15 and monthly minimum is $10.
It is always advisable to check and compare schedule of fee for each month and merchant account statement. It may be that you are unknowingly paying monthly minimum fee even though your business is seasonal and slow. In such case, you can call the provider and make a request either to reduce the fee or waive off completely.
Millions of establishments have been accepting transaction with plastic account which is handy and substitute for money. Payment for goods and services became so easy. Despite all the convenience with plastic account, still there are things to be considered to secure plastic account.
Further related information about fee credit card and Apr Credit Card
Processing your request, Please wait....
