What are Per-Transaction Fees?
Per-Transaction fees in credit card merchant accounts are fees that are paid per transaction. These fees are charged each time a merchant accesses the payment system to authorize a customer’s purchase.
It differs across service providers, and costs merchants from 0.5% – 5% of the deal amount plus certain fixed fees.
How Per-Transaction Fees Work
These are fees that are required of the merchant from many entities in a transaction. How it works is that merchants partner with merchant acquiring banks in all of the communications in an electronic payment transaction. Here, merchants also set up a merchant account with the acquirer, in which the merchant’s primary deposit account for funds from each deal is served. A merchant that receives a lot of e – payments will depend heavily on the merchant bank. This makes the terms of the merchant account an important factor for a merchant.
What are the Components of Per-Transaction Fees?
Merchants are required to pay a range of fees as regards the acceptance of electronic payments. Some fees vary, while others remain fixed. There is a wide range of acquiring banks available that merchants can partner with for electronic payment services. Now, each acquirer has its own fee structures and service capabilities which enables merchants to choose the acquirer that is best suited for them. Acquirers on the other hand will typically charge fees and a monthly fee for keeping an account.
Another component of a transaction fee is that which is paid to the network processing company. These types of branded cards are established by merchants, which they can accept at their store based on the processing network of their merchant acquiring bank. Payment card company fees, otherwise known as wholesale fees, are mostly a fixed fee per deal. However, some acquirers may be able to negotiate lower wholesale fees through network of processors.
It includes a comprehensive per-transaction fee is the acquirer and processor fees. Howbeit in some cases, other fees for a merchant may also apply. One added cost merchants may encounter is a terminal fee. This happens to be a per-transaction fee that is charged to a provider like Square for the use of a terminal in an e – payment card.
Payment card companies like American Express, Visa, Mastercard, and Discover all charge approximately the same range of fees, with only slight variations which amounts to cents in some of the components. On the whole, Visa is known to charge the lowest total amount. However, this depends on the cards used and the cards with rewards often come with higher fees. These companies mentioned each has their fees that will be charged to the merchant in a transaction.