1. Interchange Fees
Interchange fees are charges that the merchant's bank pays to the card-issuing bank for every credit card transaction. These fees are typically a percentage of the transaction amount, plus a fixed fee per transaction. Interchange fees can vary depending on factors such as the type of card used (debit, credit, rewards, etc.) and the type of transaction (in-person, online, international, etc.).
2. Processing Fees
Processing fees are charges imposed by the payment processor for handling credit card transactions. These fees can include a percentage of the transaction amount, a flat fee per transaction, or a combination of both. Processing fees can vary depending on factors such as the volume of transactions, the average transaction amount, and the type of business. Some payment processors may also charge additional fees for services such as fraud protection and chargeback management.
3. Monthly Fees
Some credit card processors may charge monthly fees to cover the costs of maintaining an account and providing ongoing support. These fees can include a monthly statement fee, a monthly minimum fee (if the business does not meet a certain threshold of transactions), and a monthly gateway fee (for online businesses). It's important for small business owners to carefully review the terms and conditions of their credit card processing agreement to understand the specific monthly fees that may apply.
4. Hidden or Miscellaneous Fees
In addition to the above-mentioned fees, there may be other hidden or miscellaneous fees that small businesses should be aware of. These fees can include chargeback fees (when a customer disputes a transaction), batch fees (for processing a group of transactions at once), and statement fees (for providing monthly transaction statements). Small business owners should carefully review their credit card processing agreement and ask their payment processor about any potential hidden fees that may apply.