Merchant Processing Program Explained:
All too often a client wants to know and understand the costs. Hopefully this document will clarify the program.
Minimum Processing Fee:
Every processor needs to make a minimum income to cover costs. Most will establish an amount of $20.00 as this minimum. Most often, a Visa™/MasterCard™ sale or sales in excess of $500.00 in a month will more than absorb this fee. In the unlikely case that a business has no transactions in the month, then this fee or any part of it will come due.
The important thing to remember is that the “Minimum Processing Fee” is not in addition to but incorporated in the total fee structure of your processing.
Monthly Statement or On File Fee:
This is a $10.00 per month charge associated with the maintenance of the Merchant Identification Number or MID. Often referred to as a statement fee, this charge is imposed to guaranty that the merchant’s identification number will be recognized.
Debit or Check Card Processing:
There are two methods of accepting a debit card. With a “Personal Identification Number or PIN” and simply swiping the card. There are cost issues and business practices to consider. Regardless of the method, debit/check card processing is generally a lower cost to the merchant with the exception of the merchant that runs individual sales in the $25.00 and below levels.
Today’s environment for credit card processing is both confusing and getting increasingly expensive. A business today must seriously consider factoring the cost of credit into the pricing of their product or service. The card brands have created a labyrinth of card type and category classifications that will impact an establishment from 2% to 4%+ depending on the size of the transaction and the type of card used. In general smaller transactions have relatively higher costs. Large transactions that are hand keyed and/or transactions that are performed with reward type or corporate type cards will also increase the cost to the establishment.
What becomes clear is that a business that is going to accept electronic payments should pursue the best education, find an ethical processing relationship and take advantage of the various rules to effectively minimize the impact to business.
We are pleased to offer, straight forward, honest dialog that can help a business owner fully understand and appreciate the complexities of the process.