As a small business owner, you must accept credit cards. They make transactions faster and easier. They give your online customers more incentive to buy from you because they are safe and convenient. The services that provide your ability to accept and process charges must be paid to do this. They get paid in the form of merchant fees.

What types of merchant fees can you expect to pay?

It depends on the service that you sign up with, but most of the time you will pay a transaction fee on each credit card charge. This can vary from merchant service to merchant service but generally, it is about 1.75 percent.

Merchants also bill for processing credits from customers who use MasterCard, Visa or American Express. Each of these companies charges them to do this. You, as a merchant, have to pay some of these fees back to the processor. The credit card companies often change these fees as their costs increase but they are nominal for each individual transaction that you take.

These fees are wholesale fees. That means that they have to be billed to both you and your merchant service and acquiring bank. Sometimes the acquiring bank, the bank that transfers money from credit cards to your bank through the merchant service, are one and the same. Wholesale fees are set firmly. You cannot negotiate them.

Incidental fees are different. These are fees that can be negotiated. These are the fees that your processor charges you for different things. They may charge you if you receive a charge-back. They may charge you if you swipe a non-qualified credit card. The problem with incidental fees is that you often do not know you must pay them until you are billed for them.

This is why it is so important to review your statement regularly. If a new charge shows up, call your processor to ask what it is for. Some companies actually charge their customers for having online access to statements. These charges can run upwards of $20 a month. That is a lot of money just to look at an online statement.

Be aware of paying PCI or payment compliance fees. These are necessary charges for you to accept cards by being compliant with security measures for High Risk Solutions. If you are not PCI compliant you will have to pay more per month. Do what you can to become compliant and you will save on these costs every month.

Credit Card Merchant Processing Fees

Another fee to be aware of is the Discount Fee. If your sales do not reach a certain threshold each month, your processor may bill you $25. Ask around about these costs because there are processors that do not charge discount fees.


Accepting credit cards is a must, but paying more to accept them than you have to is optional. Know the types of fees your merchant processor can bill so that you can put more of your sales money into your pocket each month.

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