Credit card processing might be confusing, costly and overwhelming. The first step to getting a better positive experience is to know Credit Card Processing Charges and their benefits. This article is about how credit card processing companies offer services for small businesses and what they charge for their services. You will also learn some inside details, Credit Card Processing Charges, risks and more. Parties involved in the Credit Card Processing The information below would help you to understand the role of parties involved in processing. Merchant: Business account holder accepting payment. Cardholder (Customer): Owns the credit card and use it for purchase. Card Governing Bodies: MasterCard, VISA, American Express are examples of card governing bodies who decide transaction charges and arbitrate between account holders of customers and merchants. They are also responsible for maintaining and improving transaction services. Acquiring Bank: Merchant's bank. They hold the funds and acquire money from the sale of products or services. Issuing Bank: The cardholder’s bank. They issue credit cards to their customers through which they can purchase products. Cardholders are responsible for paying that amount back to their back according to their credit card agreement rule. Credit Card Processing Charges Now we know the parties involved in credit card processing and how all work together, we will look at different types of charges associated with a transaction. This is based on your merchant service provider and you have to check your monthly bill to ensure you are not overpaying for your credit card processing. Transaction Fees Transaction fees are taken every time on using a credit card and it can be broken down into interchange fees and cents per transaction. These charges are set by the credit card processing company for small businesses and they are mandatory charges. Interchange fees are based on the type of card you are using. Debit cards are more economical than credit cards. Recurring Fees Many credit card processing companies for small businesses make extra profits by charging non-compulsory merchant fees and these charges can be seen in the monthly statement of the merchant account. However, these fees are not required to accept card payments. Monthly Minimum Fees These charges are taken by the card provider if the number of transactions or transaction volume doesn't meet monthly minimum thresholds. Statement Fees To maintain your account and to get the statement of your transactions, these charges are taken. Batch Fees Batch fees are extra charges for batching your credit card transaction to be done for that day. So, instead of fund deposit for every single payment, merchants will get the deposit in batches. Annual or Monthly Fees These are additional fees on top of the payment processor’s other charges. Takeaway You have to keep an eye on a number of things for your credit card processing charges every month. Credit card processing companies for small businesses make huge profits by taking many changes every year. You should check your monthly statement carefully every time and you can call your card provider for any query about unknown charges. In a nutshell, Credit card offers enormous benefits to customers as well as a merchant but you should take care of the card providers company’s agreement policy and their hidden charges. Also Read: What is a High-Risk Merchant Account & Why it is Important for Your Business?
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Author365 Glacier Payments is a well known payment processing company which offer various payment processing solutions for small and large scale business. Archives
March 2022
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