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Is It Normal to be Charged Almost 5% to Accept a Credit Card?

Small business owners and eCommerce webmasters who are planning to accept credit cards should be very familiar with how much banks charge per transaction and why they charge that amount.

Once you have opened up an online store or a new physical retail location, you will likely need to open up a merchant account in order to process credit card transactions. Once you do so, banks will charge a per transaction percentage along with a flat rate fee per transaction. For merchant accounts, banks and financial institutions will normally charge between 2.5 percent and 5.5 percent of your total monthly credit card sales. This number may be more or less depending on what type of business you run, whether or not your business is based online and the total amount of transactions you process.

Online Businesses and Merchant Accounts

Because online businesses come with an increased chance of customers committing fraud, banks will likely charge a higher percentage for newly opened eCommerce stores. Each transaction will come with both a flat fee and a percentage that will be deducted before the net amount is deposited into your bank account. Often times, banks will wait until the end of the month to release any funds that your business has made.

Certain online businesses such as adult websites, payday loan websites and dating websites will have a harder time being approved for a merchant account. They may have to provide more documentation and will be charged a higher percentage for the transactions they process.

Credit Card Processing: How Much Should You Be Charged?

When it comes to credit card processing and what is a fair amount that one should be charged, there is not one right answer. Some of the determining factors include:

  • The type of business you own.
  • The amount of transactions that are processed on a monthly basis
  • Your credit history
  • The financial institution you choose to do business with
  • Whether or not you’re charged a monthly fee or per transaction.
Most financial institutions will give discounts to businesses who process a large amount of transactions per month or high value transactions. Businesses who process a minimal amount of transactions will be charged a higher percentage. For newly-opened eCommerce stores and for business owners with poor credit histories, it is normal to experience 5 percent transaction rates. This number can be decreased by improving your credit score and maintaining a low charge back rate.


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