Working with a credit card processing company can come with a long list of hidden fees. Although you will have some of the basic fees laid out for you in your contract, a lot of merchants don't recognize all of the additional fees that accompany this service. Whether you decide to go with a certain credit card processor or not, here are seven fees to be aware of before you sign your next contract.
1. Hidden Transaction Fees
Yes, it's true that credit card processing companies charge the accompanied swipe and key rates every time you process a credit card. However, what some companies don't divulge is that there are certain fees associated when a customer uses a PIN number.
2. Payment Gateway Fees
As an e-commerce application for e-businesses and online retailers to use credit card payments, payment gateways come with their own unique set of fees. These fees include a setup fee, annual charges, and transaction fees.
3. Monthly Minimum Fees
Did you know that if you don't reach a monthly minimum of credit card charges, you will be fined? How does this work exactly? If your minimum is $500 but you only reach $450, you will be obligated to pay for the remaining $50.
4. Setup Fee
This is one fee that you may be able to talk your processing company out of. The setup fee typically covers the application and charges associated with opening the account.
5. Chargeback and Retrieval Fees
Chargebacks are fees that credit card providers ask merchants to cover for a fraudulent or disputed charge. These fees typically cost around $25 per disputed transaction.
6. Termination and Cancellation Fees
The fine print: If you get out of your contract early, cancellation and termination fees can end up costing you a ton of money. However, choose a credit card processor that charges fixed termination fees rather than variable ones.
7. Statement Fees
These are the easiest fees to alleviate by switching to online statements. Statement fees are essentially what credit card processing companies charge for a monthly paper statement.
Shopping for a new credit card processor? Go into your contract signing with the knowledge you need in order to make an educated decision. With an array of fees (most of which you weren't familiar with until now), signing a contract can be complicated. However, understanding what these 8 fees are and all they entail, will help you make a more informed decision.
Contributed by Scott Nelson courtesy of http://www.propay.com/