- Discount Rate: This fee is assessed by the acquirer on each transaction, (bank/company you have your merchant account with). This fee is made up of the "Interchange" rate that Visa & MasterCard charge on each transaction, which is paid by the acquirer to the card issuing bank of the card used in the transaction, and the markup, or the profit margin for the acquirer for managing the transaction for the merchant.

- Transaction Fee: This fee is assessed by the acquirer on each transaction, (bank/company you have your merchant account with). This fee is made up of the "Network Communication Fee" charged to the acquirer by the processing network and the markup, or profit margin for the acquirer managing the transaction for the merchant.

- Monthly Fee: This fee is charged to the merchant by the acquirer as a service charge. This fee is often called a statement fee.

- Monthly Minimum Fee: This fee is set by the acquirer as a minimum threshold of card transaction fees they expect to collect per merchant account on a monthly basis. Card transaction fees are defined as the, "Discount Rate" and the "Transaction Fee". If a merchant fails to accept enough card transactions to meet the threshold, they will be charged the difference between actual card fees collected and the minimum.

Example of how a monthly minimum works:

An Internet merchant with us would have a 2.44% discount rate plus a 23¢ transaction fee. The monthly minimum is $20.

The merchant does six $100 transactions in one month. $600 x 2.44% = $14.64.
Add six transaction fees. 6 x 23¢ = $1.38. Total collected card fees is $14.64 + $1.38 = $16.02.

You see in this example that the merchant did not meet the monthly minimum requirement of $20 in card fees. So the merchant would pay $16.02 (card fees) + $3.98 (difference between the minimum and actual card fees) to total $20. If a merchant does enough transactions to meet or exceed the monthly minimum, then the merchant pays only the actual card fees. Another way to look at this is that the merchant will pay the discount rate plus transaction fees, or the monthly minimum, whichever is greater.

Q. What are your discount fees?
A. For retail businesses that swipe a credit card into card reader, the discount rate is 1.64%. For Internet businesses, and all transactions not card-swiped the discount rate is 2.44%.

The discount above rate is a "Qualified" discount rate. Some transactions will not qualify and will be charged a discount rate of 3.54%. Visa and MasterCard have a complex system called, "Interchange" to determine what the acquirer, (bank/processor managing your merchant account), will pay on each of your transactions to the card-issuing bank, (the bank that issued your customer's credit card). The acquirer takes all these different "Interchange Rates", (at last count there were 164 different interchange rates) and categorizes them into "Qualified" and "Non-Qualified" discount rates. Some acquires include another category called "Mid-Qualified"

We have a link posted here which is MasterCard's Interchange rates for April 2009. Visa has their own. The two card associations vary somewhat in what they charge on Interchange.

Q. What fees do your competitors charge that you don't?
A. Many of our competitors claim they have the lowest rates, but after you analyze all their added on or hidden fees, you will see that you will often pay more than if you choose to set your merchant account up with our acquirer Intuit. The following is a partial list of hidden fees our competitors commonly charge their merchants that We Don't:

- The Non-Qualified rate our competitors often charge range between 4.5% and 5.5%. As you can see, we are at least 1% lower with our non-qualified rate of 3.54%. Merchants can expect around 30% of their transactions to not qualify. This is due to the interchange that Visa and MasterCard charge on consumer credit cards that are also "Rewards" cards. These would be the airline miles and rebates cards etc., and what they charge on some other types of cards such as foreign and business.

- Business cards and corporate cards with us qualify for a 2.44% discount rate because we have included Level 2 into the processing.  Because most other processors do not include Level 2 into their processing, your business and corporate card transactions would come in Non-Qualified on their system. So you can see that you are saving 2 1/2% to 3 1/2% on those transactions alone. For any business to business company, this is a huge and substantial savings.

- Competitors often charge an additional 10¢ transaction fee on top of their normal transaction fee for non-qualified transactions.  We do not charge this fee.

- We don't charge any cancellation fees. Cancellation fees are charged by most competitors. Typically if you cancel your merchant account before 3 years, you can expect to pay $250 or more to cancel you merchant account.

- We do not charge a  Payment Card Industry (PCI) compliance fee. This fee is not charged to the acquirer by Visa and MasterCard.  Beginning in 2008, many competitors began  charging a PCI compliance fee. Typically this would be a monthly fee, annual fee or even a per transaction fee. Regardless of how it is charged to a merchant, it is simply another unnecessary fee that drives up expenses for businesses. Our processing solutions provided to merchants are PCI compliant and we do not charge this fee.

- Some of our competitors will charge a merchant 5¢ to 10¢ for Address Verification (AVS) fee on each transaction.  Address verification is a fraud prevention tool for merchants. We do not charge any additional fee for AVS.

- Competitors often charge annual fees. We Don't.

As you can see, all of these hidden fees charged by our competitors will add up to real dollar expense for your merchant account. We do not have these hidden fees with our merchant accounts. Apply today online.

We can give you a free evaluation of your current merchant processing and give you some hard numbers for what you can expect in savings just in the discount rates and transaction fees alone. Just call us @ 1-800-221-0528.