Menu
Credit card processing fees can be quite complex, as they encompass a range of different charges levied by various entities involved in the transaction process. Because of this, it can be a huge hinderance to the level of savings that could be provided to potential clients when a side-by-side proposal is not presented based on current processing numbers.
1) Card Type interchange:
Each and every single card has a hard cost to accept. Often times, the hard cost is different per card. The hard costs for all cards can be found on the card issuers interchange guide (see “what is interchange” on our Industry information tab) These card costs typically include a percentage of a transaction and a transaction fee per transaction. For Example, for a $100 transaction on a Regulated Visa CPS/retail Debit card(One of the most common types of debit card Used) as of 4/23/2023, the hard cost to accept that card is 0.005% and $0.21 so the hard cost would be $0.71. SOME PROCESSORS HIDE EXTRA FEES IN TRANSACTION HARD COST. At Elevated Payment Solutions, We do not.
2) Card Type Markup:
Every credit card processing ISO(independent sales office) and processing partners with those ISO’s negotiate markup or “buy rates” that they have to sell in order to provide profit for their respective offices. There is than typically a split of profit. For Example, if a companies buy rates are .005% and $0.05, a company would have to write the markup rates at those fees. As listed above, the cost of the transaction then increases from $0.71 to a new cost to include your markup (which is $0.55) to $1.76. The markup is typically transparent and it is hard to hide extra markup in these fees however, some processors are NOT TRANSPARENT with their markup and remove it altogether in effort to not provide the rates they are providing.
3) AVS and other transaction type fees:
All of the card issuing brands have very small fees that can be included in your card acceptance. Typically, for every $100 it equates out to $0.03 however some processors do hide additional markup in these fees. Your card acceptance for this $100 transaction just cost you $1.79 not to include additional hidden markup.
4) Monthly (and annual) Fees:
ISO(independent sales offices) and processing partners typically have hard cost on monthly and/or annual fees as well. These hard costs can typically include some of the following items such as a statement fee’s, PCI enrollment fees, PCI non-compliance fees, wireless fees, program fees, equipment lease fees, equipment rental fees, account service charges, online reporting fees and the list can go on and on. The main challenge with these fees is that oftentimes, there is ridiculous markup in these items that processing companies charge. Some of the fees however, like PCI annual enrollment(oftentimes broken up into monthly installments and different from non-compliance fees) and statement or service charges are industry standard and should not be looked at as out of the ordinary unless those fees are an extravagant amount.
5) Equipment leasing and rental:
Some of the most expensive and scandalous ways for processors to take advantage of a new client is to have the client rent or lease equipment at a high monthly rate. Sometimes these processors use the excuse of “it will be covered under warranty” but clients are still heavily taken advantage of. On a typical equipment lease, The Merchant signs a 3 year agreement term at $49.95 per month totaling out to $1,798.20. The equipment’s hard cost for a processor or a client if sourced offline is on average $250 leaving a difference of $1,548.20 after everything is said and done. This is an egregious issue that Elevated Payment Solutions has been combating wholeheartedly. Equipment rental has been seen as high at $89 per month for the same typical equipment that only costs $250 to purchase.
This is NOT all fees that can be included in any given merchant statement but just an example of the most common. Other fees can include Assessment fees, Processor or acquirer fees, gateway fees, monthly minimums, Early termination or forced termination, chargebacks and chargeback fees, Network access fees, batch fees, address verification fees, customer service charges(yes when merchants call the 1-800 number), and more.
So please try to consider all of this when you ask “What’s your rate” and Let Elevated Payment solutions make sure that you are getting a fair deal by providing a side by side proposal for your business.
