Every business needs to be able to take credit in order to survive. Let's face it, America runs on credit! Not setting up a merchant account can cost you many potential customers. So why don't you have one?
It can be confusing, and overwhelming when trying to set up an account when you are facing unfriendly merchant account fees. Let's try to clear up some confusion with some simple explanation of these complicated fees. We will only discuss a few fees here.
ACH Fee or Daily Batch Fee - This fee is charged by some processors when you settle your daily batch and transfer the settled funds into your bank account. If you do not have any transactions a particular day, you are not charged this fee. This fee can ranges from 5 cents to 50 cents.
Monthly Statement/Support/Service Fee - The monthly fee is charged by your processor or merchant service provider and is a fixed fee, regardless of the number of transactions you have. This fee provides you with a monthly paper statement as well as any 800 toll free customer assistance/support you may need on your account. Usually this fee is around $10 per month but can be as high as $15. This is a reasonable fee and it is normal to have this fee on every merchant account.
PIN Debit Transaction Fees: This fee only applies to debit cards, and when you have and use a pinpad with that debit card. This fee is a fixed transaction fee and is usually around 70 cents. Some processors however now charge a low transaction fee (around 20 cents) and then bill you the debit network fee which varies, depending on the debit network.
Address Verification Service Transaction Fee (AVS) - This only applies to merchants who are not swiping transactions. This fee is usually 5 to 10 cents and is usually lumped in with the transaction fee above, although some processors charge this as a separate line item. By having AVS, it provides you with valuable address and ZIP code lookup on the cardholder, and as a result helps reduce fraud. AVS is mandatory by Visa and MasterCard on all keyed accounts where cards are not going to be swiped.
Understanding merchant account fees helps to understand merchant accounts and why you should get one. Don't let fees get in the way of something that could help your business grow.
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