What Are Typical Credit Card Processing Rates & Fees


If you’re starting your first business and want to accept credit card payments, then it’s time to learn how much you will pay for a typical credit card processing fee. There’s just one catch: there are actually a variety of fees that are associated with credit card processing and you have to know about all of them before you get started. 

What Type of Credit Card Processing Do You Need?

The first order of business is to determine what kind of processing you need. This will depend on the kind of business you own and whether you will be processing credit cards in person or will only be processing the credit card number. Why is this important? Because it affects the fee that you will be charged.

Retail, Restaurant and In-Person Processing
When you own a brick and mortar store, a restaurant or any establishment where the customer pays for his or her purchase in person with an actual credit card in hand, you need a card-present merchant account. You’ll also need credit card terminals that can swipe credit cards for verification and authorization. If you need a card-present merchant account, then you’re in luck because the primary fee associated with merchant accounts will be lower for you. Merchant account providers consider card-present transactions to be less risky than card-not-present transactions, such as online transactions. This type of credit card transaction is considered less risky because you have more opportunities to verify that the card actually belongs to the person using it. The fee that will be lower for card-present merchant accounts is known as the discount rate and functions as a percent of each credit card transaction that is processed. Therefore, the lower the rate, the less you have to pay.

Online and Other Card-Not-Present Processing
When you don’t have access to the actual card, it’s harder to verify if the payment is legitimate. As a result, the discount rate is almost always higher for anyone who needs a merchant account for online orders, telephone orders or mail orders. That rate can go even higher if you don’t get the verification information that the merchant account provider requests for authorization. Take the time to look at different discount rates and inquire about the necessary steps you need to take to verify every card-not-present transaction.

Wireless Credit Card Processing
Even though wireless credit card processing is considered a card-present transaction, different fees may apply due to the mobile nature of being wireless. Always ask before signing up for a merchant account if the same fee applies to all types of processing or is specific to one kind.

Other Typical Credit Card Processing Fees
While the discount rate is probably the most important fee in any merchant account, there are a variety of other fees that must be considered.

Opening the Merchant Account
When you first open an account, you may be charged a fee for your application, for setup or for both. Every merchant account provider deals with these fees differently, so ask before you move forward with the application.

Maintaining the Merchant Account
You will also be charged on a monthly basis for the maintenance of the account. This charge is a flat rate every month and is usually not very high. In addition to the monthly account charge, there is a monthly minimum charge. Merchant account providers will charge you a flat rate for the month if your separate credit card transactions do not add up to more than that minimum. This is especially important for small businesses who do not expect to reach that minimum as often as a large company.

The Other Transaction Fee
The discount rate isn’t the only thing you will be charged for every credit card transaction. The per transaction fee is a flat rate instead of a percentage that gets charged every time you need to process a card transaction.

As you can see, there are no typical fees when it comes to credit card processing. How much you end up paying every month depends on a variety of things, including how much your business ends up making every month. To get a better understanding of the amount you can expect to pay for your merchant account, start asking around. Your competitors are the best resource since they already know what they pay their merchant account providers every month. In addition, it’s important to research merchant account providers thoroughly and read all of the fine print in each agreement. You don’t want to miss any possible hidden charges. With the right combination of recommendations and research, you can find credit card processing that you can afford.