Regardless of what type of business you are running or who your merchant account is set up with, there are going to be a range of fees associated with the account. The rates themselves will vary depending upon the provider, but there are a number of different types of rates associated with a merchant account, and knowing how to understand the different rates can help considerably in running your day-to-day business.
The first and foremost rate that everyone has to worry about regardless of who they are is the application fee. This is always a one-time fee that providers will charge you, and some will charge at the very beginning as part of the actual setup fee, while other companies will include it in the actual solution purchase or the cost of the lease. There are very few companies out there who do not have application fees, but if you can find one consider yourself lucky.
Beyond that, rates are dependent upon such things as the hardware and software that goes into operating your business. Here’s where things get tricky, though, because much of the cost of hardware and software is going to depend on whether or not you are running a physical location out of a brick-and-mortar building or if you are a mobile business that is continually on the go. In addition, although leases are sometimes beneficial to you as a business owner because they keep you from paying for a terminal up front, if you plan on doing business over a long period of time it is considerably cheaper to actually purchase the equipment rather than pay for a lease over the next X amount of months. For example, while a $30 a month lease for 48 months sounds like it might be a good idea at the beginning, by the time you add that up you could have paid for several of the actual devices that you were leasing in the first place. Not to mention, leases are incredibly difficult to get out of once they have been entered into, and if your business goes under within the first 48 months you are still liable for the lease until every last penny of the contract has been paid.
Programming fees are also required, but they are generally only one-time fees that vary depending upon the selected provider. There’s also the standard discount rate which is the fixed percentage amount deducted from the purchase cost of each and every transaction that comes through your company, in addition to the per transaction fee that is standard across the board, although once again these fees range depending upon which company you go through. The rates are also affected by conditions such as a monthly minimum transaction value, to ensure the provider is getting the most money it can, as well as gateway access, and in some cases companies will actually charge you for your monthly statement.
These are just a sample of the types of fees that can affect the rates of your merchant account, so pay close attention to the fine print whenever you enter into an agreement with a merchant account provider.