Although it would be nice to go through a merchant service for free, you better get used to merchant account fees because there are lots of them. Right from the start you will begin getting docked with fees, but the convenience and professionalism make having a merchant service all worth the fees. Here are 7 merchant service fees you can expect to deal with.



1. Transaction fee. The transaction fee is the flat rate fee that is charged with every transaction that is completed. It's not much of a merchant account fee, but you can accept to pay anywhere from $.10 to $.30 per transaction.

2. Authorization fee. This merchant service fee is charged as soon as the transaction is processed. What is bogus with this fee is that you are still charged regardless of whether the transaction is accepted or denied.

3. Monthly minimum fee. All merchant services have different monthly minimum fees which makes it vital that you look into the different rates. A monthly minimum fee is how much you are guaranteed to pay for fees at the end of the month. For example, if all of your months fees only add up to $20 but your monthly minimum fee is $30, you can expect to pay the $10 difference at the end of the month.

4. Statement fee. This fee is charged for the total generation of a monthly transaction record. This and your monthly minimum fee are the merchant service fees you can get used to paying at the end of the month.

5. Discount rate. This flat-rate fee is a percentage that is taken out of each sale that is processed through the merchant account. All merchant services' discount rates vary depending on what their intentions are, but the rates range from .85% to 8%.

6. Termination fee. This is potentially the largest merchant account fee that you will face, but it would be the last fee you would pay. The termination fee is a fee you pay for ending your merchant account before the term expires. Most merchant account terms consist of two to four years. The ending result for terminating your account too early can range from $150 to $300.

7. Free equipment. As mentioned, it's nice when things come at you free but very rarely does it ever. The "free equipment" that you are given when you begin a terminal must be returned in perfect condition at the end of your term. If anything needs to be replaced, expect to drop another $300 to $500 for whatever is broken or damaged.

It may sound crazy after reading all of the merchant service fees that come with having an account, but it is truly to your benefit to have an account. You just have to be ready to fork up the dough, because there are a lot of merchant account fees that get handed out regularly.

Copyright (c) 2007 Jim Saka