How Much Do Merchant Services Cost? Explained 2024

Most merchant service providers charge a monthly fee which is automatically deducted from a merchant’s account. Fees will probably arise both as a monthly service fee and on a per-transaction basis. Some of the typical pricing models used by merchant services providers to recover card processing fees include:

• Flat Rate: The pricing fee for charge types, such as 2.3% per transaction. This usually succeeds with small retail companies with fewer sales.
• Interchange Plus: Commonly used pricing method by merchant services providers. The rates they provide to a merchant are defined by each credit card issuer and then include a fixed per-transaction fee, which will include 2.3% + $.10.
• Direct Interchange: A flat monthly fee rather than a per-transaction fee. Better for high-volume merchants than for small lower-volume businesses that may not break even on the established fee.
• Tiered Rates: The tiered rate is based on the volume of transactions that a business does. High-risk transactions or transactions with some types of cards might incur a higher rate. As the fees change frequently, tiered rates are not very suitable for B2C, and even for small businesses might prove inconvenient.

What Is a Merchant Account?

Businesses have checking and savings accounts they use to pay bills and collect payments. A merchant account is essentially a type of bank account that is used specifically to process transactions with a payment gateway. Service providers deposit payments into the account and withdraw fees or possible chargeback costs. Merchants then transfer funds from their merchant accounts into their business bank accounts where they will then access it.

What is Settlement?

The process of transferring the amounts received through credit or debit card transactions to your business’s operating account. Ideally, each transaction would get processed perfectly, but business owners know this is not reality. To ensure that your business is credited exactly, you will have a daily settlement with your merchant services provider. During your search for providers, be sure to ask them about the settlement process. With the use of modern technology, settlement should be almost an automatic process and must run on exception, so that it only requires flagged transactions to research. The settlement process is what decides which funds will be put in a merchant’s account by the end of each business day.

This post was written by a professional by Exzact Business Solutions. TRANSPARENT | AFFORDABLE | SIMPLE point of sale credit card processing St Petersburg fl, Websites, and Social Media Done Right. Exzact Business Solutions are on a mission to educate local businesses to ensure smiles, savings, and solutions. Exzact clients save an average of 30% on their processing alone. No Contracts, Free Equipment, Local Support, No Rate Increases, and More. Exzact Business Solutions goal is to educate the local business community in order to ensure smiles, savings and solutions. Exzact Business Solutions is an Independent Sales Organization with strategic partnerships dedicated to cultivating reliable and trustworthy relationships in the Payment Card Industry, allowing to tailor products and services to the needs of each merchant. Contact EBS and see what a difference having the right advocate can make!