One thing you need to know is that if you want to grow your small business, it is important that you are approved for a merchant account. If not, you are stuck with cash, check and store credit as the only options for payment processing. If you are truly planning to have any kind of e-Commerce presence, then this will not work for your business. And even if you still plan to grow your small business, customers will still want to use their credit cards or debit cards.
That said, you also need to know that once you are done with merchant account approval process as well as setting up the payment processing system, the credit card processing will call for some fees. And fees can vary depending on the chosen credit card processing company. Although you may feel that the fees are a bit wanting, eventually, you will generate sales three fold. Below is a list of credit card processing fees you need to know:
Start up or annual fee
This is the first fee that comes in after you are approved for the merchant account. It may also turn into an annual fee. Generally, you will be assessed start up fee whether you are using a credit card processing service or your bank. This is the fee charged for setting up your payment processing equipment and for approving your merchant account. Some organizations can make it an annual fee, while others will make it a one time start up fee.
Monthly statement fee
Many companies charge their merchants a small fee for their monthly statements. A good thing about the statement is that it shows all details that have occurred in every credit card transaction. Therefore, your card processing company will always have a comprehensive list.
Discount rate
This is a transaction fee paid by a merchant for using the credit card processing. Usually, it is a small percentage of each transaction. This discount fee is based on varied factors, all of which are important for you to understand. For instance, the fee can depend on the type of card you choose for payment. One thing to note is that a debit card is always the cheapest card you can accept from your customers.
Transaction fee
This is the minimum fee a credit card processing company will charge for every credit card transaction. Transaction fee depends on the chosen method of payment and is only a few cents. However, it may vary depending on the amount of business generated through the credit card. It is prudent to know that the higher the amount of credit card business generated, the lower the transaction fee per your credit card transaction.
Minimum monthly fee
Apart from the per transaction fee, you may also be charged a minimum monthly fee. If for instance you don’t make a certain level of credit card business monthly, the processing company may charge a minimum fee. Again, this fee cannot put a dent in your wallet, but it is a reminder that you have goals to accomplish in your business.