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There are always costs associated with doing business. This is true no matter what line of business you are in. If you’re in manufacturing, retail, or any other line of business you have costs that you have to be aware of. Today we’re going to focus on merchant account fees.

What is a Merchant Account?

Here are a few basics about merchant accounts. A merchant account is what gives you the ability to process credit cards and get paid for your products and services. Part of the process is entering into an agreement with a bank to have a line of credit for processing the cards.

If your business involves taking credit cards as a form of payment, you’ll have to have a merchant account. If you have a physical store you’ll also need to get a terminal. If you do business online or via the phone you’ll be fine with just an internet gateway.

What are the Different Merchant Account Fees?

As with everything, merchant accounts have their own fees as well. You’ll have to consider these to be just another cost of doing business. Keep track of what you’re paying so you know how it affects your bottom line.

The main fees that you’ll have are the statement fee, gateway fee (if using a gateway), and the discount rate. The statement fee is usually around $10 a month and covers the merchant account company creating and sending you a statement. This is mainly just their standard monthly fee, but they call it the statement fee. If you have an internet gateway, you’ll have to pay a standard monthly fee for that as well, usually around $10. A lot of companies will lump the statement and gateway fees together.

A third fee you’ll come across is the discount fee. This fee is broken up into two parts. The first part is a flat rate, usually somewhere around $0.30 per transaction. The second part is a percentage fee that they take from each transaction. This rate will depend on your merchant account, so use it as a way to compare different companies.

Depending on who your provider is you may also run into other fees. These include a chargeback fee, customer service fee, batch fee, and others. Make sure you are aware of all of the fees before signing up with any company.

Make Correct Profit Calculations

It’s important to stay on top of how much you’re paying for your merchant account fees so that you don’t lose money you don’t need to. It’s always a sad day when someone realizes that they thought they were making a larger profit than they actually are because they forgot about a fee they have to pay. Keep on top of your fees, and be sure to shop around from time to time and find better deals.

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