Merchant account processing is performed on a given merchant account by the company holding that account. The fees associated with this processing are based on a number of factors, including Interchange, the merchant account holder’s credit score, level of risk for the business, the circumstances associated with transactions made through the account, as well as the specifics of the company that has issued the merchant account.
When a company obtains a merchant account, it is enabled to accept transactions through credit cards, debit cards, check cards, gift cards, and other electronic mediums. These transactions are usually made either through a credit card terminal by swiping the card, or on the internet via the merchant’s website, facilitated by a payment gateway account. Once the transaction is made the information is sent on a phone line or the internet to the company that issued the merchant account. The transaction is processed by this company, which will then take a portion of the money in exchange.
The rates for merchant account processing are heavily determined by the Interchange baseline rates set by Visa and Mastercard. Different transactions fall into different categories, or tiers, incurring fees based on those tiers. Fees can be qualified, which are the lost; mid-qualified, which are a percentage point or two higher than qualified fees; or non-qualified, which are another point or so above mid-qualified.
In addition to these fees, merchant account processing fees can also include batch fees, authorization fees, transaction fees, chargeback fees, statement fees, and monthly minimum fees.
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