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Credit Card Processing Companies and Their Fees and Costs

If your small business is planning to take credit and debit cards — in person, online or thru phone– you’ll have to work with a credit card processing company. There are tons of things to look into when selecting one, including fees and costs.

Credit card processing fees can be as much as 5% on everything you earn from your credit and debit card sales, says the U.S. Small Business Administration. But some companies may charge much lower than others while offering no different products and level of service.

Below are some of the key credit card processing fees to be aware of:

Interchange Fees

These are fees charged for each transaction you process, and it’s covered by the payment processor, which pays to the card-issuing bank. How much you’ll pay for a transaction depends on a lot of factors, like the card type (debit, credit, rewards, etc.), transaction type (in store, online or by phone), and size of your transactions (bigger and less transactions mean lower fees). Personal transactions cost less in interchange fees, with the card being physically present, thereby reducing the risk of fraud.

Monthly Statement Fees

The credit card processing company can collect monthly statement fees to cover the cost of sending you a statement. The cost is about $10 a month.

Application and Setup Fees

You may to pay a fee for a processing service application, as well as for the set up of necessary equipment. This fee varies substantially from one company to another.

Monthly Minimum Fee

This is the minimum amount in fees to be collected by the processing company in any month. If you don’t reach or exceed this minimum amount, the processing company will charge you to make up the difference so you can meet the minimum. For instance, if the company’s monthly minimum fee is $25 and your credit card transaction fees for a month only total $20, the company will charge an additional $5.

Monthly Gateway Access Fee

Some processors can collect this monthly fee for offering a payment gateway, which sends transaction data to the credit card companies from your processing system. Monthly fees cost around $10 to $30.

Early Termination Fee

You could be charged this fee if you cancel your contract before it expires.

Don’t worry about all these fees as ultimately, you will see that they are all part of the larger benefit of using a credit card processor. They are an investment. What’s important is that you understand all the fees and service terms, and should you have any concerns or questions, always resolve them with the company. If they can’t give you a decent answer or resolution, then look for another company.

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