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Merchant Services – Deep Dark Secrets

Have you wondered if the MasterCard Fees and Visa Fees were genuine or were they made up? Have you ever wondered what were the deep dark secrets concerning Merchant Services Costs? What about why there was so much fine print in that Merchant Services Processor’s contract. Why is there an early termination fee?

The rate costs come from MasterCard Management Services and Visa Management Services and are generally updated twice per year. The rates that you are charged is based on their individual MasterCard rate sheet and Visa rate sheet. Now you must add to that rate the percentage your processor tacks on for their commission. Did your sales representative ask how much they might add to your fee for their commission? If you were asked that question, you have a representative that has your best interest at heart.

The cost for each type of charge card that has been issued to your customers from the banks (called the card issuer) has a definite rate associated with each of those cards. However, you might not see the individual costs for each card, but obviously you are being charged for what ever card is being swiped through your terminal. If your merchant services statement does not itemize every card you scan through your terminal, then you will never know what is happening with your account.

For example you might not know if the card is a generic MasterCard or a MasterCard World card. The same is for Visa. You could be swiping a generic Visa or a Visa Rewards card. The World Card and the Reward Card have higher rates that you have to pay. The rate is shown on the Merchant Credit Card Processing Sales Jobs Services Cost Sheet so you should see this itemized on your merchant services statement.

The fee charge (actual cost) to scan the card (called the transaction) is usually around $.10 per transaction. That $.10 is added to the rate you are being charged. One exception to the $.10 transaction fee would be small ticket. Small ticket is associated with restaurants or fast food purchases and even coffee shops. Generally the transaction fee for restaurants i.e. small ticket transactions is about $.04 per transaction. The lower transaction fee is allowable due to the high volume and low average ticket of the transaction.

One of the deep dark secrets on your Merchant Services statement is the cost to batch your terminal at the end of the day. Batching is when you move your sales from the credit card terminal to your bank account through the system. Many merchant services contracts are written with a $.20- $.25 batch fee. The batch fee is a “mystery junk fee” that is not required. I hope you aren’t paying it.

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