Merchant account credit card processing is a complex process involving many variables, such as the merchant account holder’s credit score, level of risk, Interchange tiers, and the specific company one has obtained the merchant account through.
A merchant account allows a business to process a credit card when making a transaction. Since many customers prefer to pay through credit opposed to other means, a merchant account may increase a company’s business a great deal. However, merchant accounts incur fees when a credit card is processed through one.
Interchange is one of the most important factors in merchant account credit card processing. Interchange is a rate set on different tiers by the credit card companies Visa and Mastercard. The Interchange tier a that a particular transaction falls into is based on several things, including the medium of exchange (check card, credit card, business card), as well as whether the card is swiped to make the purchase, or is keyed into a credit card terminal.
Depending on how a given transaction is performed, a qualified rate, mid-qualified rate, or a non-qualified rate will be charged to the merchant account. In that order the merchant account will be charged successively more, based on factors described above, such as the payment method.
In addition to these costs, merchant account credit card processing can also be responsible for batch fees, charged by some companies when the merchant account sends a day’s worth of transactions in for processing; an authorization fee, charged before a transaction processed; a transaction fee, charged if the transaction is successfully processed; and a monthly statement fee for a statement indicating how much processing was done during a given month; as well as chargeback fees and monthly minimum fees.
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