These are the typical fees you will see associated with a merchant account. Rates will vary from one provider to the other. We showcase a wide range of merchant account providers included in the following links.


Transaction Fee (Retail/Internet)Average Discount Rate (Retail/Internet)SupportCancellation Fee
$0.10 / $0.220.28%-1.58% / 0.28%-2.08%24/7 Support. U.S. Based.$0
$0.10 / $0.100.20% / 0.50%24/7 U.S. Based$0
$0.10 / $0.180.15% / 1.99%24/7 Support$0
$0.16 / $0.160.55% / 2.09%24/7 Support U.S. Based$0
$0.25 / $0.200.79% / 1.28%24/7 US$0

Finding a low cost merchant account is easier today, then it was 5 years ago. While processing rates and fees remain roughly the same, setup and solution purchase costs for Internet businesses has gone down considerably. Where it used to cost $600 to setup, many now only charge $0 to $150 to setup your business with a merchant account. Non-High Risk Internet businesses should never pay any more than that for a merchant account. Retail businesses can expect to pay anywhere from $75 and up for a retail swipe terminal solution.

Why Specific Rates Aren’t Posted

Comparing tables of rates is not the best way to shop for a merchant account because it usually leads to the account holder paying too much for the services they need. In the vast majority of cases, the account rates form only a minor portion of the overall cost of accepting credit card payments. There are many factors that determine the “price” of an account including:

  •  required equipment for processing,
  • associated fees like start-up and termination,
  • and monthly minimum sales.

More importantly, however, rates vary widely by the type of card used:

  • credit,
  • debit,
  • rewards,
  • and corporate, for example.

The type of business is also important because that determines, in part, how the consumer’s information is captured. Swiped transactions are charged at different rates than those that are keyed in or taken over the phone, which will vary according to whether sales are made online or at a retail counter.

There is no one “standard” rate. In fact, both Visa and MasterCard have more than 100 different categories for merchant accounts rates, and these can even change according to the accuracy with which the card data was collected. Typically, rates are grouped in tiers according to qualified, mid-qualified, and non-qualified status. Initially, just remember than the less “qualified” a transaction is regarded, the more it will cost to process.

If a business tries to shop for a merchant account by a set rate without plugging in the variables that make their endeavor unique, they will pay too much in the end.

Below follows explanations of the different rates and fees in no particular order.

Merchant Account Fees Explained

Application/Setup: $0 – $100+ (one time fee)

Most providers have an application fee. Some charge it right out at the beginning while others add it into the solution purchase/lease costs. Some providers do not have an application fee at all.

Hardware/Software: $0 and up or Lease: $20/month and up.

One important note worth mentioning here, though leases are sometimes beneficial to you because they keep you from paying up front for a terminal, it’s usually much better to purchase equipment from the beginning than pay a lease for the next 12, 24, 36 or 48 months. Why? Sometimes a lease can cost up to 3 times or more than purchasing the solution outright from the beginning. While a $29.95 monthly lease for 48 months sounds good, in reality it isn’t. Leases are very hard to get out of once started. If your business goes under before the 48 months are up, you still have to pay on the hardware/software costs until the last penny has been received by the leasing company. Also, the lease fee you see does not include your state sales tax or the amount charged for the damage/loss waiver. If you do go for the lease, always determine the lease’s buyout clause, end of lease terms, and especially beware of clauses that allow the lease company to continue charging you even after the 48 months have passed (they say that you should contact them in writing one month prior to the end of the lease, or you can just let them keep charging you).

In some cases, today you can get free software or terminals from some providers, it depends on the type of account you set up with them.

As a MerchantSeek visitor you can get:

Free Mobile credit card machines and readers from LEADERS when you set up a new account with them.

Free MerchantWARE virtual terminal from Merchant Warehouse when you set up a new account with them.

Programming: $0 – $100+ (one time fee)

This usually only applies to retail merchants who have changed from one processing company to another. The programming process isn’t difficult but watch out for the cost, some providers may nickel and dime you on programming fees. Why do they charge this fee if you use your own equipment? It’s used to somewhat make up for the loss of not selling or leasing you their equipment.

Discount Rate: Standard is 1.49% – 4% per transaction or learn aboutInterchange Plus Pricing

This is the fixed percentage amount that is deducted from the purchase cost. The lower discount rates are for retail establishments while the higher are for Mail Order/Telephone Order (MOTO) and Internet-based businesses. Why the lower cost for retail? The instances of credit card fraud are much lower, so banks are able to charge lesser percentages for these types of businesses. A typical discount rate for US business is right around 2.30% for online and 1.79% for retail, perhaps a little higher or a little lower. Non-US businesses will pay a higher discount rates closer to the 3% to 4% range. Depending on your provider and current qualification levels you may want to check into Interchange Plus Pricing.

Don’t let a few tenths of a percentage point be the deciding factor between two providers. For example, if Provider “A” charges 2.29% and Provider “B” charge 2.49% you’ll only save $0.20 for every $100 processed through your merchant account.

Transaction Rate: $0.16 – $0.50 per transaction

In addition to the discount rate, a transaction fee is also deducted from the purchase cost. Also, just as with discount rates, transaction fees are lower for retail businesses while slightly higher amounts are charged for MOTO and Internet establishments. Address Verification (AVS) may either cost an additional fee, or may be included in the base transaction fee. The typical transaction fee for US businesses is right around $0.30 while the higher end of this fee is sometimes the case for Non-US businesses.

Monthly Minimum: $0 – $25 per month

The fee is based on your transaction and discount rate fees from your credit card sales each month. For instance, say your bank charged $25 as a monthly minimum, the transaction and discount rate fees collected by the bank must equal or go over $25 each month. If this is the case, no monthly minimum will be charged. However, if the fees collected for that month do not meet the $25 minimum, you will then be charged the difference. Not all processors have a monthly minimum fee; however, most do.

Gateway Access: $0 – $25+ per month

Since in most cases, the Secure Payment Gateway provider (e.g. Authorize.Net, VeriSign, etc.) is a separate company from the Merchant Processor, they charge extra fees. For every month that you are on their system, you usually pay an access fee. Example: If you sign up with Merchant Warehouse, you will get their own gateway for free but need to pay this fee if you choose to use
The usual fee to pay for gateway access is around $10.

Statement: $0 – $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 your credit card or telephone bills.

Daily Close-Out: $0 – $0.15 each day

Many providers charge a daily closeout fee associated with software and terminal processing solutions, where at the end of every business day you close-out all your transactions.

Address Verification System (AVS): $0 – $0.05 per transaction

The AVS service checks to see that the billing address given by the customer matches the credit card. If you opt not to use AVS, VISA and MasterCard will not support your transactions and will charge you an additional 0.17% to 1.25% on those sales. Most merchant accounts do have an AVS charge, even if it’s bundled with your transaction fee. The AVS service works only with US credit card holders. Currently, there is no AVS service in place for non-US credit card holders.

Chargeback: $5 – $35 per instance

A chargeback occurs when the cardholder disputes a charge that they found on their monthly credit card statement. A large number of chargebacks can cause your merchant account to be dropped totally and leave you in a bind when trying to set up a new account for your business. If this is the case, you may not be able to get another merchant account for several years. It is essential that you take the necessary steps to reduce and potentially eliminate the instances of chargebacks.

Reserve: Varies, ask the provider for details

Some providers will require you to have a reserve account where the amount is determined by your businesses estimated sales receipts. A reserve is almost always charged to a Non-US based 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. Otherwise, there usually isn’t a charge. In most cases, the reserve fee is used to cover for any chargebacks. A reserve should be avoided if all possible.

Annual Fee: $0 to $100 per year

Some credit card processors will charge this fee just as an additional way to pay for maintenance and system upgrades. This fee usually isn’t disclosed upfront. Ask your merchant account sales representative for information.

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