While it is hard to say because many processors keep it a secret up until you are about to sign the contract, the fees can vary greatly. What we will do is provide you with general ranges and then give you a worst case scenario so you can calculate for your business.
Generally credit card processors charge the following fees:
- A monthly minimum, monthly fee, or flat fee
- An authorization fee
- An address verification fee
- A statement fee
- A settlement fee
- An interchange rate (AKA discount rate) (%)
- and a few other miscellaneous fees that will vary
The monthly minimum is a certain amount that you must be able to process in a month. This is classified as a flat fee by us because you are basically required to process enough transactions to pay this amount in fees or else you get charged the flat fee.
Fee Range: Generally from $10.00 - $30.00
Example: Let's say you have a $25.00 monthly minimum. This means that you need to process enough transactions that the fees you pay for the month amount to $25.00 or you will have to pay that fee. Let's say you only process enough transactions to amount to $13.00 in fees, this means that you will be charged an additional $12.00 that month to meet that $25.00 fee.
An authorization fee is a fee that you pay each time you authorize a card. This is usually fixed and tends to be higher if you are processing internet transactions over retail transactions.
Fee Range: Generally from $0.10 - $0.35 per transaction
Address Verification Fee:
This is basically a fee that you pay when the address on a credit card is verified. Some processors don't charge this fee.
Fee Range: Generally from $0.00 - $0.15 per transaction
This is a fee that nearly all processors charge. It is usually regarded as an accounting fee for your merchant account.
Fee Range: Generally $5.00 - $15.00
This is the fee you pay each time you settle your batch. Some processors don't charge this fee.
Fee Range: Generally $0.15 - $0.75 per batch.
Interchange / Discount Rate:
This is a percentage of each transaction that is paid per transaction. Meaning a charge of $10.00 with a 2% interchange rate would have a discount fee of $0.20. This fee tends to be higher for internet transactions and lower for retail transactions due to fraud risks.
Fee Range: Generally from 1.25% - 3.5%
Worst Case Scenario:
If you are trying to calculate fees for your business for a business plan, or some other types of calculations, it is best to use a worst case scenario so that you know for a fact that you are overestimating. Here are some good "worst case scenario" numbers to work with.
Please note, these numbers basically mean you signed up with a horrible company that is ripping you off, which can happen. Always read your contract fully, and we mean every single page! If there is a question that you don't know the answer to about your processor, then you don't know enough about them or your contract!
Monthly Fee: $55.00 / Month
Authorization Fee: $0.50 / Per Transaction
Interchange Rate: 3.5% of each transaction
Those are bad numbers that should help overestimate the cost of you processing credit cards. The high monthly fee is meant to include not only a high monthly fee but some of the other fees like the settlement fee and any of those miscellaneous fees that a processor might throw at you.