Lowest Credit Card Merchant Account Fees

Understanding merchant account fees will be vital if you are to avoid falling prey to hidden or junk fees. Merchant service providers that offer an extremely low rate to commit to a contract, or rush you through the signing process before you have thoroughly read a contract, can cost you hundreds, if not thousands of dollars. It will be important to be aware of what some of the bogus charges are to protect your business.

A common hidden fee is the signing bonus. On the surface, this is an excellent deal. The provider will often profess to have the lowest rates and greatest service available. However, this teaser fee will be raised a few months after signing and will normally be followed by regular raises in rates until you are paying more than you would have paid a reputable provider.

Lower rates may only apply to specific cards. In many cases, the transactions you conduct for the majority of your business will not fall into the category required to meet the lower rate. In addition, other rates will be higher than normal so you will be paying a premium for your transactions in other categories. “At will” changes in rates is often buried in the fine print of a contract. This gives the provider the ability to change rates at any time with no cap on the amount they can increase a fee.

An Over-limit or excessive transaction fee may be assessed if you exceed your expected transactions on a daily or monthly basis. The fee may be a percentage of the transaction or a flat amount per transaction over the “limit” that has been determined by the provider.

Cancellation rates that range from hundreds to thousands of dollars often can prevent a merchant from changing providers when they wish to do so. It is very important to read the find print to determine what the cost of cancelling your contract will be. If you do not see information about cancellation rates, ask the representative about the costs before you sign a contract or commit to a provider.

Most companies charge Monthly Minimum Fees. You can avoid paying this fee if you exceed the minimum each month. If you have a low volume of transactions, it will often save you money to choose a higher statement fee that does not have a monthly minimum rate. In most cases, this charge is negotiable, so if it seems excessive, talk to the representative about reducing or eliminating the charge.

Conversely, a High Monthly Volume Surcharge may be assessed on merchants that have a large volume of transactions on a monthly basis. This is normally an additional percentage on top of your regular discount rates, so be sure to check your contract before signing to make sure what the fee is and what volume of business will cause you to be accessed this charge.

Multiple Monthly Fees can often disguise hidden charges. Be sure to read your contract carefully before signing to determine exactly what your Statement Fee covers. If you find that you are being “double billed” for monthly charges, contact the provider immediately. Some fee charges such as customer service, debit access, help desk, etc., are normally included in your Monthly Statement costs and should not be on your statement as a separate charge.

It will be important to spend time understanding merchant account fees and learning what you should look for in a contract before you sign it. Spending time reading the fine print of a contract will often save you time, money, and frustration.