How Much Are Credit Card Processing Fees?
Credit card processing charges are the fees that the business bears when they receive payment through a customer. If the customer has paid through a credit card, the business has to pay a small amount as a fee.
The credit card processing fees usually depends on a lot of factors: the payment type, the rates of different company and many more. For example, the processing fee of retail websites is higher than a physical terminal. Various factors influence the degree of the processing fees.
Usually, it varies in terms of the percentage value of the total transaction amount. But the number highly depends on the other factors too.
Some Of The Factors Which Influence Credit Card Processing Fees
- Type Of Business: The major factor that affects the credit card processing fees is the type of business a merchant is operating. If a business is being categorized under low-risk business, then that merchant can enjoy low-cost processing rates. But if a merchant is categorized under a high-risk business, then that merchant needs to pay little higher credit card processing fees as this involves a variety of risk factors in terms of payment settlement.
- Interchange Rates: It is a fee incurred by the bank which receives the amount from the customer. This rate is usually charged by a credit card company. Every time a business customer pays using a credit card, the specific company charges this rate. The receiving bank account of the seller has to bear the charges.
This rate is usually decided by the network company with the issuing bank account.
- Merchant Account Provider Fee: The role of the merchant account provider is to act as an intermediate party. Forbearing this service to the credit card company network, it charges a certain percentage of the amount. This amount is known as the merchant account provider fee. For letting the company accept the payment from a customer, it charges this fee.
This fee also includes a small percentage on the amount transferred. A per-transaction amount is also levied on the business.
- Processing Of The Card: This is one of the best factors that influence credit card processing fees. How the card is used by the customer plays an important part. The customer can use his credit card in different ways. He can swipe the card in a swiping machine, and he can pay through telecom. He can also utilize his credit card on online order payments.
Every type of transaction carries a different amount of fee from the whole transaction. For example, the processing cost of an online transaction is the highest. Therefore, in that case, the business will have to pay a higher processing fee.
As we can see, different factors influence the degree of processing fee. The processing fee also includes some of these charges
- Flat Fees: A generic amount charged for all transactions:
- Interchange Plus Pricing: Apart from the interchange rate, a generic fee is charged in case of any transaction.
- Tiered Fees: Some specific transaction also carry tiered costs such as medium tier, sub-medium tier costs.
The business has to induce many costs in the case of online transactions. One such cost is the credit card processing fee. To make sure that the business does not lose out on more amount, they need to save. The processing fee should be calculated very mindfully at the time of deduction. For more information & get to know cc processing rates for your business, you can mail us at [email protected] or get in touch by filling the merchant application form.