Processing Fees Explained

We know it can be confusing- there are many terms involved with credit card processing.

What is Cost Plus Pricing?
Also know as "Interchange Plus" is the term used to describe a merchant account pricing model where a fixed markup is applied directly to interchange fees published by Visa®, MasterCard®, Discover® and American Express®. Essentially, it is wholesale pricing plus a flat percentage.
We use this pricing because it is transparent and allows our customers to know exactly how much is going to the bank and how much is going to your credit card processing company.

What are Interchange Fees?
Credit card processing rates set by each card brand (Visa®, MasterCard®, Discover®, American Express®).
Interchange is the portion of a transaction that’s taken by an issuing bank and is dictated by the card brand (Visa, MasterCard, etc). This fee typically makes up the majority of processing fees and do not vary by processor. Interchange rates depend on the type of card processed, the method the card is processed, transaction data, and merchant category code (MCC). Interchange fees are typically made up of a percentage of the transaction amount and a per transaction fee. For merchants processing transactions in a card-present environment, average interchange rates are typically 1.65% and $0.10. For merchants processing transactions in a card-not-present environment, average interchange rates are typically 1.95% and $0.10. Current rates can be found each card brands website.

What are Dues & Assessments?
In addition to Interchange, each card brand includes additional fees based on the transaction amount and per transaction. These fees are called dues and assessments and typically range from 0.105% - 0.45% on the transaction amount [ $0.0025 - $0.04.] Like interchange, assessments are exactly the same for all credit card processors and no processor can give you a lower rate or a better deal on assessments.

What does Discount Fee mean?
Under cost plus pricing, the "discount" is the processor’s margin. One half a percent for every dollar settled through the merchant account will be included on your monthly statement.

What is an Authorization Fee?
An authorization is per item fee that is charged each time a merchant sends a transaction to their customer’s issuing bank to be authorized. Some authorizations, such as a voice or touch tone, will cost more than the base authorization fee.

What is a Batch Fee?
A “batch” is the total dollar amount of credit card sales charged in a single business day that will be deposited into the merchant’s bank account. Instead of receiving a deposit for every credit card sale, the sales are “batched” together into one overall deposit.

What are our Monthly Fees?
Our monthly fees include the fixed cost of maintaining a merchant account and our PCI Compliance Fee which includes $50,000 in breach protection.

What are Per Occurrence Fees?
Based on the activity of your account, additional fees may apply. These items include chargebacks, retrievals, ACH rejects, TIN/TFN Invalid, (Tax Identification Number/Tax Filing Number) and after hours help desk calls made to First Data when Frontline Processing is not open. Our live support is available Monday-Friday 7:00-5:00 pm MST.

Flat Fee Pricing Explained

What is the Discount with Flat Fee Pricing?
Under flat rate pricing, it is easy to reconcile and anticipate month processing fees. For qualified transactions, 2.75% will be charged on the transaction amount. Qualified transaction include most debit card and card present transactions. For non-qualified transaction , 3.75% will be charged on the transaction amount. Non-qualified transactions may include card-not present transactions and business rewards cards.

Authorization, Batch Fees, Per Occurance and Monthly Fees are the same as above.

What are the Interchange, Dues & Assessments for Flat Fee Pricing?
With flat rate pricing, interchange, dues, and assessments will not be passed through, but these items will impact how transactions qualify.
Interchange is the portion of a transaction that’s taken by an issuing bank and is dictated by the card brand (Visa, MasterCard, etc). This fee typically makes up the majority of processing fees and do not vary by processor. Interchange rates depend on the type of card processed, the method the card is processed, transaction data, and merchant category code (MCC). Interchange fees are typically made up of a percentage of the transaction amount and a per transaction fee. Current rates can be found on Visa and MasterCard’s websites.
In addition to Interchange, each card brand includes additional fees based on the transaction amount and per transaction. These fees are called dues and assessments and typically range from 0.105% - 0.45% on the transaction amount and $0.0025 - $0.04. Like interchange, assessments are exactly the same for all credit card processors and no processor can give you a lower rate or a better deal on assessments.