How to Compare Credit Card Processing Fees


There are many things to consider when choosing a merchant account provider, but a top concern for most business owners is usually credit card processing fees. The best way to choose the right merchant account provider for your business is to compare the fees of several different companies. Learn how to compare all of the different rates for credit card processing and find a provider that fits within your budget.

Compare Credit Card Processing Setup Fees
The very first fees you’ll have to deal with are the application fee and the setup fee. Every merchant account provider has a different policy when it comes to the initial rates it charges potential customers. When you are comparing providers, ask if they are willing to waive these initial charges, but don’t base your decision on setup charges alone. Remember that both the application fee and the setup fee are one-time charges and the monthly charges are really the ones that can make or break a budget.

Discount Rates for Credit Card Processing
The discount rate is the fee you want to focus on the most when comparing merchant account providers. If this is your very first merchant account, then it’s important to know that a discount rate is not what it sounds like. It is not a discount on your rate, but a percentage that every merchant account provider will quote you and that percentage refers to the percent they will take out of the dollar amount of every credit card transaction. The higher this percentage is, the more money you will pay to your merchant account provider, so obviously, you’ll want to look for the lowest discount rate you can find. Keep in mind that this rate changes depending on what type of merchant account you need. The higher the risk involved with a type of credit card transaction, the higher the percentage is going to be. For example, if you process a credit card payment over the internet without the card present and you don’t get the proper verification information, you will end up paying more for that transaction because it’s considered a higher risk. When comparing discount rates, don’t just compare the base rate. Make sure you also compare how much more the provider normally charges for higher risk transactions.

Per Transaction Fees
On top of the discount rate, there is another fee that gets charged for every credit card transaction and that fee is known as the per transaction fee. The good news about this credit card processing fee is that it is not a percentage but a flat rate, usually charged in cents. Comparing the per transaction fee of various providers is easy: the lowest rate will save you the most money.

All Other Fees to Compare
Every merchant account comes with some monthly fees. The first is the monthly minimum that pertains to both your discount rate and your per transaction fee. If those transaction fees don’t add up to the amount of the minimum, then you will have to pay the minimum. The other fee is your account maintenance fee. While your other fees will fluctuate month to month, these will not, but you should still factor them into your comparison of various merchant account providers.

Credit Card Processing Equipment
In addition to the fees for opening and maintaining a merchant account, there are other important products that you will have to pay for to start processing credit cards. You can’t properly process credit cards without the right equipment and that equipment doesn’t come cheap. However, many merchant account providers offer special deals on the credit card processing equipment you purchase through them and some providers even offer free equipment to their customers. If you own and operate an online business, then you will need software in place of that equipment. Again, many merchant account providers offer discounts or free software especially for their customers. Because the cost of equipment and/or software can be such a large expense, comparing the cost of the equipment can be a factor in choosing a merchant account provider. If you’re trying to decide between two providers with similar fees, the decision becomes easier if one of the providers offers you free equipment.

Getting the Processing Services You Need
There’s one important factor that should never be overlooked when you are comparing merchant account providers and that’s getting the credit card processing services that you pay for. The merchant account provider with the lowest rates may be the best option for your business, but before you sign on the dotted line, make sure you thoroughly investigate their services. A provider that is slightly more may be worth the additional cost if it provides 24-hour technical support, high quality customer service and fast turnarounds on all of your transactions. It will end up costing you more if you have to end your agreement with one provider to sign up with a new provider that can get you the processing services you need.

Comparing multiple providers is one of the best ways to find the one that works best for your business. If you look at the complete picture of every provider, including credit card processing fees, equipment and services, it won’t be long before you know which one to choose. 

Find out how you can get the lowest credit card processing rates and the best service from one provider: North American Bancard. Read these articles to learn more: