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Credit Card Processing Fee That Merchants Should Be Aware Of
Credit card processing fee is related to online business. We all living in a technologically advanced age where everything has a got a digital touch. If we talk about the present situation, people have adopted the fruitful outcomes of technology very well. If we specifically talk about business, small merchants are trying their best to cope up with the situation. Since the arrival of COVID-19, people are giving more importance to contactless as well as online transactions. Therefore, small merchants are upgrading their business equipment so that can accept credit card payments online.
Online business is more complicated in nature. If you are not tech-savvy, you might not understand the terms and conditions inextricably associated with it. A merchant must need an online payment gateway through which the merchant can accept credit card payments. If you need an online payment gateway, you must pair your business with a payment processor.
Well, new merchants believe that doing online business is really difficult and it cuts down the overall profit margin. But, it is not completely true. If you are using an online payment gateway and advanced payment terminals, you have to pay something to the merchant processor as a credit card processing fee.
Yes, the credit card processing fee is something that every online merchants have to pay. A credit card transaction is completely online as well as a real-time process. There are certain organizations associated with it. When a customer initiates a credit card transaction after purchasing tings, the important credit card information is passed to the merchant processor through the online payment gateway securely. The entire data remains in an encrypted form and therefore, it is very difficult to hack. The payment processor shares the data with the credit card network. Finally, the credit card issuing bank receives the information from the credit card network. The bank then checks the cardholder’s account. If there are sufficient funds left for the transactions, the bank gives approval. Otherwise, the credit card transaction gets declined. After that, the bank shares the same with the credit card network. The credit card brand passes the information to the merchant processor. Thus, the credit card transaction is completed.
So, by now, you have probably understood why there is a need for a credit card processing fee. Now, the credit card processing fee structure is quite complicated. Yes, different merchant processors have different pricing plans. Some offer interchange plus pricing whereas some offer flat-rate pricing. If you are new to online business, you will definitely get confused. Well, we have covered these pricing plans already and so, you will not have enough problems.
Flat rate pricing structure is very simple and many new merchants go with this structure. But, we at International Payment Solutions believe in transparency and this is why we offer interchange plus pricing structure. The interchange plus pricing structure is complicated but transparent. It maintains the transparency between the merchants and the merchant processor solutions.
However, the problem arrives when merchants see some other fees along with the credit card processing fee in their monthly statement. They become confused and we at IPS understand this concern very well. This is why we have elaborated on some fees that merchants generally have to pay along with the credit card processing fee. So, have a look at the following points:
Multi-Currency Processing Fee
Well, if you are running an online business it means you will have international customers. In such a case, you have to accept multiple currencies. There are various merchant processors that allow its merchants to accept multiple currencies. But, you have to pay a multi-currency processing fee in order to avail of this service.
Account Change Fees
As a merchant, if you want to make some sort of changes in your merchant account, you have to pay account change fees. Account changes refer to changes in banking information, addresses, pertinent business information and many more. There are many payment processors that don’t charge it. But, if your payment processor includes this in the monthly statement, you have to pay it.
PCI Compliance Fee
Many credit card brands make PCI compliance compulsory for the merchants in order to accept credit cards. Many credit card processors charge a PCI compliance fee. So, if you are getting this in your monthly statement, you have to pay it.
Chargeback Fees
Well, the chargeback fee is something that is in the hands of the consumers. If the customers do not get satisfactory service from your end, he or she might file a dispute. If the credit card transaction gets disputed, the customer will get refunds and as a merchant, you have to pay a chargeback fee.
So, these are some additional fees that a merchant has to pay along with the credit card processing fee.
Not An IPS Merchant?
If you want to accept payments online, you can become a merchant of International Payment Solutions that is one of the efficient merchant processors. You can also elevate your business to the next level with the help of the advanced payment terminals of IPS.
