Credit Card Processing Services & Fees – Everything you Need to Know

When it comes to business, there are a lot of moving parts – and one of the most important is payments. After all, what’s the point of selling a product or service if you can’t actually get paid for it? That’s where credit card processing comes in.

Credit card processing is simply the process of accepting credit cards as payment for goods or services. This can be done in a brick-and-mortar setting, online, or even via mobile devices. And while it might seem like a relatively simple concept, there’s actually a lot that goes into it.

For example, did you know that there are different types of credit card processors? And that each one charges different fees? If you’re not familiar with the ins and outs of credit card processing, it can all be a bit overwhelming.

But don’t worry – we’re here to help! In this guide, we’ll cover everything you need to know about credit card processing services and fees. We’ll start by discussing the different types of processors and their fees. Then, we’ll give you some tips on how to save money on credit card processing fees.

So, let’s get started!

Types of Credit Card Processors

There are three main types of credit card processors: banks, merchant service providers (MSPs), and independent sales organizations (ISOs). Each one has its own benefits and drawbacks, so it’s important to choose the right one for your business.

Banks: Banks are the traditional option for credit card processing. If you have a business bank account, chances are you’re already using a bank for processing. Banks typically charge higher fees than other processors, but they also offer more comprehensive services.

Merchant service providers: MSPs are third-party companies that provide credit card processing services to businesses. They typically have lower fees than banks, but they may not offer as many features and services.

Independent sales organizations: ISOs are similar to MSPs, but they’re usually affiliated with a particular credit card brand (like Visa or Mastercard). This can be beneficial if you want to accept a specific type of credit card, but it also means that you might have to pay higher fees.

Now that you know the different types of credit card processors, let’s take a look at their fees.

Credit Card Processing Fees

There are four main types of credit card processing fees: interchange fees, assessment fees, gateway fees, and processor markup fees.

• Interchange fees: Interchange fees are set by credit card companies (like Visa or Mastercard) and paid to the bank that issued the card. They typically range from 1-3% of the transaction amount.
• Assessment fees: Assessment fees are also set by credit card companies and paid to the bank that issued the card. They cover the cost of things like fraud prevention and chargebacks. Assessment fees are typically a flat rate, but they can also be a percentage of the transaction amount.
• Gateway fees: Gateway fees are charged by MSPs and ISOs for providing access to the credit card network. They typically range from $0.10 to $0.30 per transaction.
• Processor markup fees: Processor markup fees are the fees charged by your credit card processor for processing transactions. They typically range from 1-3% of the transaction amount, but they can also be a flat rate.

Now that you know the different types of credit card processing fees, let’s take a look at how to save money on them.

How to Save Money on Credit Card Processing Fees?

There are a few different ways to save money on credit card processing fees. The first is to choose the right type of processor for your business. If you have a small business, an MSP or ISO might be the best option. But if you have a large business, a bank might be a better choice.

Another way to save money on fees is to negotiate with your processor. Many processors are willing to lower their fees if you commit to processing a certain amount of transactions per month.