Knowing what merchant account fees you’re going to pay to your processor will help you avoid unexpected costs. This is especially true of those who’re high risk. So, if you want to avoid unfavorable surprises and enjoy the most reasonable deal, just keep on reading the post.

Merchant Account Fee: What to expect

You can’t connect to credit card networks if you don’t have a merchant account. So, a merchant account for credit card acceptance allows your company to charge customer credit cards. When it comes to merchant account providers, they’ll require a fee/fees on top of the interchange rate.

These fees aren’t fixed for everyone: they’re generally based on the sales volume and the business type you have. This means rates vary from business to business, even with the same merchant account provider.

How does the process begin? Well, the merchant account provider deposits the charged funds in your bank account at regular intervals. The fees charged by the merchant services provider depend on the way the card is processed.

In-store transactions, where the customer is swiping his/her own card, offer the lowest risk of fraud. That’s why they generally come with the lowest fees. Online transactions and keyed-in transactions (ordering over the phone) offer a higher risk of fraud. Thus, they usually charge higher fees.

Overall, credit cards are being processed based on several components, such as:

Setup

There’re providers that charge a setup fee and ongoing monthly fees for support and security/PCI compliance, etc. Others require an account cancellation fee that can be expensive for those interested in changing their providers.

Capture

This is charged for capturing credit card information. The mechanisms come with varying costs. However, an online or physical high risk merchant account payment gateway may charge you from $50 to several hundred dollars.
Processing

The merchant account provider passes the captured card data on to the card processing networks operated by the major credit card companies. The processing fee that high risk merchants pay may be up to 10% of sales.

Penalties

You’ll be required to pay penalties for chargebacks and disputed transactions. There’re suppliers that charge for processing disputed transactions, even when the transaction is cleared.

eCommerce merchants can expect to pay:

• Merchant Account Fee
• Chargeback Fee
• Discount Rate
• Merchant Account Registration Fee
• Monthly Statement Fee
• Refund Fee
• Transaction Fee

It’s also important to be aware of the so-called “rolling reserve fund.” This is a small sum that the bank holds against your payment processing for the purpose of covering contingencies, including chargebacks and refunds.

This is a fixed percentage amount based on your weekly sales volume. It usually makes up 5-10%. Acquiring banks will place the money into a rolling reserve fund, and you’ll get a payout of these funds 6 months later.

Merchant Account Fees: High Risk Merchant Accounts

If you’re looking to obtain a merchant account for your business, be aware that the following factors will determine your merchant account fees: industry type, processing history, and expected sales volume.

If you’re a high risk business owner, expect to find more expensive fees for your merchant account. However, if you can find affordable and reliable merchant services, you’ll get the best deal for your business. So, don’t fail to do some research to identify the best provider for your own high risk business needs.

Consider turning to eMerchantBroker.com, a reputable high risk payment processor that’s rated A+ by the BBB. By the way, EMB is voted the #1 high risk credit card processor in the US and also has an A rating from Card Payment Options. EMB never fails to get to know you and your business well so to deliver the best possible merchant account solution. Importantly, eMerchantBroker.com offers the lowest merchant account fees for high risk merchants to help businesses grow successfully.

There’re a number of factors that acquiring banks take into account when figuring out your merchant account fees, with high risk accounts being more costly. Overall, you’ll hear from processors that your price may vary based on the way you process payments.

Your payment gateway can be either a point-of-sales (POS) system in the store, a mobile phone reader or an online portal. The risk of fraud associated with each type of gateway is crucial in determining the fees, with online carrying the highest level of risk, thus resulting in higher costs. So, choose your merchant account provider carefully to take your business to the next level with ease!