Merchant Account Rates and Fees Frequently Asked Questions

All providers have an application fee. Some charge it right out at the beginning, others add it into the purchase/lease costs for equipment/solutions. Application fee costs can be as high as $100+.

What are statement fees, usually?

Most providers usually charge between $10 and $15 per month. The statement fee is charged because at the end of each month you will receive a statement from your processing bank that will list all the transactions that went through for that particular month. It's very much like a credit card or telephone bill.

What is a gateway fee?

A gateway fee is charged by the processing bank for maintenance of the system that is used to "pipeline" credit card transaction information from your business or web site to the network of banks that further process the transaction. Usually a typical gateway fee is around $10 per month.

Are there monthly minimums associated with accepting credit cards?

Usually the monthly minimum is around $25; for some banks it might be higher. This processing fee is collected by your transaction and discount rate fees from your credit card sales each month. So, for instance, say your bank charges $25 as a monthly minimum, if the transactions and discount rate fees collected by the bank equal or go over $25 that month, no monthly minimum will be charged. However, if the fees for that month do not meet the $25 monthly minimum, you will then be charged the difference.

What is a chargeback and are there any fees?

A chargeback occurs when a customer has their credit card credited for a for an item they returned, etc. Fees for a chargeback are usually around $15 to $20. There are ways to reduce chargebacks for more information please go to our Articles Section.

Is voice/telephone authorization available?

Yes. However, most providers do not mention it on their site. You will have to inquire for availability. Touch-tone telephone credit card processing is a great option for low volume merchants. There's no equipment to purchase. Setup fees vary. Transaction fees associated are usually around $1 per call plus a slighter higher discount rate (2.50% and up). One touch-tone phone processing solution is able to reduce chargebacks and fraud by using "voice stamp" technology, you can get more information on them by clicking here.

Are there any programming and/or installation fees?

Usually not. However, some providers do charge $100 or more. If you are a retail business and purchased a terminal from somewhere other than from the merchant account provider you are obtaining a merchant account from they may need to do some slight programming modification to the terminal unit so it can work properly with the processing bank they represent.

What is a discount rate?

This is a fixed percentage rate that is deducted from the purchase cost when an order is made. A small transaction fee is also deducted in addition to the discount rate, see below for details.

What kind of transaction fees are associated?

These can vary depending on what processing solution you are using and what credit cards you accept. An overall ballpark figure would be between $0.15 to $0.35 per transaction. Retail card swipes are usually the cheapest, followed by computer-based processing, then real-time internet processing. For detailed information regarding the different processing solutions available read our solutions guide.

Are there any setup fees?

Most of the time no, but some providers may charge up to $50.

What is the daily close-out fee?

This type of fee is associated with software or terminal processing solutions where at the end of every business day you close-out all your transactions. Most of the time there is no fee for this.

Do providers require a reserve account?

Some providers will require you to have a reserve account where the amount is determined by your businesses estimated sales receipts. Dealing with this type of reserve is NOT recommended. Usually a reserve is almost always charged to an out-of-US merchant who is trying to obtain a merchant account. Also, businesses that do a high volume of sales each month may be charged a reserve fee.

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