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Merchant Fees That You Might Be Able To Avoid

Credit card processing is a major expense for any business, so a regular review of the merchant’s processing agreement is a good idea to avoid unnecessary fees. Sometimes it’s possible to negotiate for lower merchant fees, while other times fees can be avoided completely by switching providers or choosing the right processing company to begin with.

While all merchant accounts come with fees, here are some of the most common credit card processing fees that merchants can avoid entirely.

Gateway Fee

The gateway fee, usually charged at a flat monthly rate, is required for the provider to process transactions in real time. This fee can be avoided by agreeing to have credit card transactions processed later. There is a downside, however, as the merchant will not be able to tell immediately if the customer’s account has the necessary funds. Some merchant accounts include gateway processing with no additional fee.

Early Cancellation Fee

Some merchant accounts require paying an cancellation fee if the merchant cancels services or switches providers before the contract is up. Early termination fees can be as high as several hundred dollars, usually as a flat fee. Merchants should avoid signing contracts with credit card processing companies that require any type of cancellation fee.

Hidden Fees

There are a host of hidden fees a credit card processing company may charge, including statement fees, quarterly fees, monthly PCI compliance fees, setup fees, annual fees, and application fees. Merchants should ask for a list of all ancillary fees before signing up for a merchant account.

Terminal Fees

Terminal fees are charged to merchants with a physical location who directly swipe customers’ credit cards. Terminal leases are often costly but unnecessary. Merchants can save thousands of dollars in the long-run by purchasing a terminal outright for a one-time, lower fee.

Minimum Fees

This fee is charged to merchants who fail to reach a minimum transaction volume for the month or year. While the minimum transaction volume varies by provider, it is often around $50,000 annually. This fee can be avoided by shopping around for a different provider.

All credit card processing companies charge their own set of fees. While some cannot be avoided, other fees can be negotiated or avoided completely. Flat rate fees on merchant accounts in particular can be eliminated or negotiated lower, allowing merchants to save hundreds or thousands every year on credit card processing.


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