What are the different types of Merchant Account Fees?
Set up fee
As the name suggests, this is a type of fee that a merchant has to bear while setting up the specific merchant account. To accept the debit and credit cards of the customers, a merchant has to set up a merchant account with a merchant account provider and thereby receive the payment from the issuing bank. In order to cover the cost for these services, a merchant has to pay a set up fee (should not exceed $200) to the merchant account provider upfront.
Charges for interchange
This is a specific type of charge that an owner of a business has to bear upon opening a merchant account. A financial transaction made by a credit or debit card is processed by a specific network. This network also charges a percentage of money depending upon the type of transaction processed by the business. Among the various types of cards, the specific network generally charges a lower fee for the transactions that have been made through card transactions. This cost (interchange) is marked up by merchant account providers and that is how they make profit on interchange plus. The plus part of that phrase being the mark up by the merchant account provider.
Fee charged for each transaction
This is a type of fee that a merchant has to pay after opening a merchant account. The processing network also charges a specific amount for each transaction made using the different types of cards. These networks generally charge a per transaction percentage from .50%-6% plus a transaction fee of anywhere from .20 cents - .75. cents depending on the type of card and the specific transaction fee you agree to pay the processing company.
Charges for using the payment gateway
This is a monthly fee that a holder of a merchant account has to pay for the services of a payment gateway provider. A merchant generally has to pay about $15 to $20 for using the payment gateway services.
Fee for cancellation of contract
A merchant account provider charges a specific amount if the merchant cancels before the date of termination. These are some of the common types of fees that a merchant account holder has to accept for using the chosen merchant account provider. This fee should not exceed $395 but be aware if you have signed up for a monthly minimum you are responsible for the monthly minimum times the months you have left on your contract. This can cost you thousands depending on the contract you are in.