Processing Fees

Before your customers can pay you using their credit cards, you need a merchant account at a payment processing company. Some payment processors – also called merchant processors – can facilitate credit card transactions in-store and online. They may also have facilities for processing paper checks, eChecks, cash payments, and ACH payments.

The fees charged for your merchant account will vary depending upon what provider you select. For instance, some payment processors offer crucial services for free while others will charge for every feature. Here are some typical payment processing fees you may be levied.

Application fees

Some merchant processors require an upfront payment before they even review your documents. This fee is non-refundable, and you’ll be charged even if your application is denied, so make sure all your documents are in order before you pay. If you can, find a merchant processor with no application charges.

Transaction fees

This is the main source of income for merchant processors. Some take a percentage of every transaction, while others will issue a weekly or monthly cover charge for all activities. Base fees end up being higher, so the per-transaction model is smarter, especially for slow business months.

Web security

If you have an online store, it’s important to have end-to-end encryption including SSL or TLS certificates. You also must be PCI compliant. Some merchant processors will charge a fee for SSL / TLS while others offer it for free.  Virtually all merchant processors will impose a fee for PCI non-compliance, so make sure to contact your processor for assistance with becoming PCI compliant.

Web store features

You website must be linked to the merchant processor to facilitate payment. You can choose to have customers check out within your site, or they could be redirected to your payment processor if you prefer. Some processors may charge for tools like online shopping carts which you need in order to enable your customers to pay you on your website.


To facilitate the actual payment, you can use electronic card readers, mobile apps, or online software. Your card readers will have to be programmed for each card network (Visa, Amex, MasterCard etc). Your payment processor could charge for card set-up, and for electronic readers and apps. However, there are payment processors that do all this free.


For every transaction, your bank and your customer’s bank both charge a fee, but they’re usually accounted for in your merchant processor’s cover charge. However, if a customer reverses their transaction, your processor will refund them and charge you for the trouble.  All payment processors charge a fee for Chargebacks.

For more information on merchant account fees, or to sign up for a merchant account, please call (888) 924-2743 or go to

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