When applying for a merchant account, high risk retailers will wonder what the merchant account fees are up front once they are approved and begin running an account. This information is for your good; just so you understand why some deductions are made each time you make a card transaction. On top we’ll take you through a few merchant account pricing models so you can go for the provider with the one you prefer.
Merchant account fees
For every card transaction you make, your merchant account incurs the charges below;
Transaction fees– They make up the major cost of operating a merchant account. Transaction fees are payments for every transaction you make, whether approved or rejected by the customer’s card issuer.
Fixed fees– On top of the fee paid for each transaction, a flat fee will be charged by your credit card processors to cater for extra services like customer support charges, monthly statements. A few processors will charge an annual flat fee.
Variable fees– For example chargebacks; these are fees you only incur when you do something that validates them.
Hidden fees-These are minor fees (which we DON’T charge at EMB) such as security charges, file fee, or conversion fees which often come from the blues and shoot up within months of signing the contract.
Merchant Account Pricing Models
There are four primary models providers utilize in pricing. They include;
Tiered– It is the most commonly used plan among payment processors; perhaps loved for its complex pricing model that allows account providers to stage-manage customers. Be sure to fully understand these fees.
Interchange-Plus– So far the most transparent pricing model. It plainly lists all fees and junks upfront. After signing up, details of all charges are sent along with your monthly statement.
Membership– just like the Interchange-Plus, the membership model is transparent, but charges a lower fee to favor retailers with huge amounts of transactions.
Blended-A model preferred by processors who do not charge monthly fees. As a substitute, all costs are merged to form a standardized rate per transaction.
However, when checking rates, be warned that they may vary and fluctuate depending on different factors. That’s why you need to confirm with EMB for the most accurate rates. Nevertheless, rates for most high risk industries start from 2.99 percent, but specific extremely high risks e.g. debt consolidation may start at 3.95 percent. Offshore accounts are also very costly with rates ranging between 5 to 9 percent. But with EMB, you will always enjoy the best rates.