Credit card processors have earned disrepute for levying fees under many pretexts and attempting to swindle the customers. Same is also true for merchant account processing. But one needs to realize the fact that charges and fees are a source of revenue for them. By being knowledgeable about various fees can help you appreciate and understand better the credit card processing fee structure. To educate yourself about credit card processing fees here is a list of various types of fees that are usually charged by card processors:

1. Application Fee.

You pay this upfront at the time of filling out the application for the merchant account service but is normally not levied by reputable companies. Try avoiding this fee as far as possible.

2. Start up Fee.

This is the fee taken for setting up the credit card processing account. It is usually in the range of $25 to $35.

3. Statement Fee.

This has to be paid if you want to receive detailed account activity statements at the end of each billing cycle. These list out valuable information like the number of transactions processed, the time and dates of these transactions etc. This is a monthly fee in the range of seven to ten dollars.

4. Minimum Monthly Fee.

This is charged to ensure that your account generates revenue for the card processing company even if there are no transactions or if they are below a certain limit. This is also called ‘monthly minimum not met’ charge.

5. Discount Rate.

This is the most important of all the credit card processing fees imposed for accepting credit cards and is a percentage of each transaction processed. It normally lies in the range of 1.5-2 percent of each transaction. You may have to pay a higher percentage if yours is a high-risk business.

6. Charge back Fee.

You are liable to pay this fee only if you see a large number of charge backs. Typically, a specific number of charge backs are allowed in a month before this fee is levied.

7. Gateway Fee.

You need to worry about this only if you will accept payments over the internet. To facilitate transactions over the web, a credit card processing firm needs to have basic web infrastructure in place including a shopping cart function and/or a portal that allows buyers to make and monitor payments.

8. Termination Fee.

This fee is applied for early termination of the contract. Normal contract periods are between one to three years. The fee ranges from one hundred to three hundred dollars. However, not all vendors collect this fee.


As a general rule of thumb, accepting credit cards from customers should cost around 2% of total receipts. This figure is affordable enough for the businesses to accept credit and debit cards as well as large enough for the card processing vendors to profitably run their business. Any vendor with fees lower than this may sound enticing but should be regarded very carefully as it is usually not worthwhile for the service providers to charge any lower than that. Be on the lookout for hidden credit card processing fees and charges if the offer looks too good to be true. Review the contract carefully including all the footnotes and fine print.

credit card processing fees

Whenever a purchase is made with a credit card, it incurs various fees as it goes through the process of being paid. Since there are various different parties involved in the processing of a credit card transaction and the information and funds change hands so many different times, some of the parties involved end up charging one another for their part in the transaction process.

The biggest source of credit card processing fees is the interchange fee. An interchange fee is paid to card-issuing banks (which are the banks that the credit card companies or types belong to). The banks of credit card companies (such as Visa or MasterCard) determine how much they want to charge a merchant for being able to accept their credit card. Typically this charge is a percentage of the purchase plus a flat rate. For example, the interchange fee that is charged to accept a Visa credit card is 1.51 percent plus 10 cents per transaction.

Other fees charged to process a credit card fall under the category of being considered a “flat fee”.

One type of flat fee is a terminal fee. This is charged to merchants that have in-person businesses for the physical swiping or inserting of a credit card. Merchants have the option of either buying or leasing a terminal from their payment processor company, but may find it more-cost effective to purchase the terminal in the long run. Online businesses receive a similar fee, but theirs is known as a payment gateway fee instead, which is charged whenever a payment is processed through eCommerce.

There are also annual fees, for using the services of a provider, and if a merchant decides to end their contract with a provider early, they may also be charged an early termination fee by the company.

Finally, there are incidental fees. One of these is specific to online businesses and merchants, which is the Address Verification Service, also known as the AVS. This is a fee placed on every single online transaction in order to verify that the information that a customer provides is correct.

Customers also have the ability to dispute a charge to their credit card when it appears on their bill. If they file a complaint about a merchant or a business with their bank, that merchant will be charged an incidental fee for the information retrieval request as this complaint is investigated by all of the different parties involved. If the customer’s request is approved and they get their money back, the merchant will also be charged a chargeback fee in addition to the retrieval request fee, as well as losing the money from the initial transaction.

Ultimately, all credit card providers and payment processors have different types of charges and fees that a business may incur while processing a customer’s payment, but it is important to stay aware of and on top of these fees at all times.

When starting up your very own business for the first time, there are a lot of factors to consider. One of the biggest is that when customers make a purchase from you using their credit cards, you need to have a system in place to process their payments. That’s where a payment processor comes in.

So, what exactly is a payment processor?

A payment processor is essentially a third party company that handles your transactions and that are made in your business, so that customers can make payments with their debit or credit cards. The company takes the customer’s card information and passes it on to the customer’s bank as well as your business’ bank, and it ensures that there are sufficient funds on the customer’s card to process the payment and approve it.

The payment processor also ensures that the card information that the customer is providing is correct. This is done as a security measure and in order to make sure that the customer’s card is not being used in a fraudulent way, so that the card holder is not charged for payments that they did not make. Another security measure that payment processors provide is ensuring that the charge being made to a customer’s card is from a legitimate business that is who it claims to be.

Payment processors play a major role in ensuring that a business is fully able to function, and that they are able to accept payments from their patrons in order to keep the business running.

Another important aspect of the payment processor is its timeliness. What the company does happens in a matter of seconds, when a customer swipes or inserts his or her card into the card reader, or inputs their credit card information if your business is run online. The mere few seconds that a confirmation takes to load or that a customer is told to “please wait” are when a payment processor does its job, meaning that the exchange of information is nearly instant.

Some payment processor companies are able to work across multiple platforms; a business could use the same company for multiple services. This means that your business could sign up with one company, and be able to utilize it at an in-person location, on a website, and on customers’ mobile phones as well.

Some payment processor companies, such as Square and Cayan, even give the added option of providing a business with a mobile reader that can be attached to a phone or tablet to be used with their company’s services. These companies oftentimes develop apps that can be installed on phones or tablets in order to be paired for use with their mobile readers in the most efficient way possible. This makes interactions between the customer and your business run even more quickly and smoothly than they would before, and ensures that the customer is receiving consistency in service and processing speed across any platform they decide to use when shopping with your business.

Accept Credit Cards

Once somebody turns 18, they are introduced to the world of “adulting”: signing their own paperwork, not needing parental permission, starting to accept financial and personal responsibility for themselves, and as a part of that, starting to build their credit.


When picking a first credit card, there are a couple of factors to consider. 


First, it’s important to pick something that is easy to keep track of in terms of spending. If you are new to managing your own money, this is crucial. It can be done by deciding to have your first credit card be an in-store credit and rewards card. This way, it’s easier to keep track of your purchases and how much you need to pay back, since you probably have a decent idea of how much you spend per month at one specific location.


Stores like American Eagle Outfitters, Target, and Nordstrom all have an in-store credit card. The store itself is the only place that accepts its credit card, which means that you are sure to keep a limit on your spending.


Secondly, it’s an added bonus to find a credit card that helps you build up some other form of benefits or rewards. For example, cards from the locations above allow you to build up rewards points with their company, which can be used for discounts on purchases, gift cards, or even cash back. 


Another popular form of rewards that can be found with credit cards is air miles. Alaska Airlines and other major airlines have credit cards that you can sign up for with them (oftentimes while you’re on your flight!) and most places accept the card. As you make purchases, you’re also building up miles to use towards flights with Alaska Airlines and its partners that accept the same points system, which include KLM and Carthay Pacific. You can also sign up for an account with a Star Alliance airline, like United or Air Canada, which also allows you to accumulate points with airlines like Air New Zealand, Lufthansa, Swiss Air, Turkish Airlines, and South African Airways.


There are some individuals who have learned how to use the points system on their credit cards so successfully that they rarely pay for flights anymore. There is one drawback of using an airline’s credit card as your first: it is more difficult to keep track of your purchases, as they aren’t limited to one specific location, which can lead to excessive spending. 


One specific example of a great first credit card is the Victoria’s Secret Angel Card. This card can be used at Victoria’s Secret, PINK, and partner stores Bath & Body Works and Henri Bendel. You’re able to build points up to receive rewards cards for discounts in the mail every month, there are no annual fees for maintaining the card, and you also receive early access to all major sales. In addition, you receive a rewards card for your birthday month. It gives you the chance to limit your spending and receive rewards at the same time, which is an amazing way to start to build your credit and start to “adult”.

Merchant Services On Poshmark

There’s a new way of thrift shopping, and you can do it right from your cell phone.


An app called Poshmark allows users to put themselves in the shoes of the merchant by posting their clothing and accessories for other users to browse and buy. Individuals who are selling their clothes can mark them by brand, size, and colour, and potential buyers can search using the same categories.


While the seller, like any other merchant, can set their price, the app also makes it so that buyers can negotiate or make offers, which the seller can either accept or decline. They are also able to make a counter-offer at a price that they see as  more reasonable, which the buyer can then counter-offer as well. The offers can go back and forth for a full 24 hours, after which the process has to start all over again.


Up-and-coming merchants can even use the platform to run their own boutiques. The app allows boutiques to use a feature called “new with tags retail”, which indicates to potential buyers that they are shopping a boutique rather than someone’s closet. 


One unique service that Poshmark offers sellers is that the costs of priority shipping are paid for. This is done by charging buyers a flat rate shipping fee of $5.95, and simply sending the seller a shipping label. 


The app also protects its buyers, though. Through its protection policy, a buyer can cancel a purchase if the seller does not ship it after a week, and they are entitled to full refunds if the item arrives and is not as described (sellers are supposed to disclose all damages and wear and tear to an item if applicable).


A seller can also look into a buyer’s closet and see if there are any items that they’d be willing to trade for. They either take the transaction off the app, or if they decide to stay on Poshmark, both parties set the price of the item to $3 (Poshmark’s minimum price) and then notify each other to purchase each other’s listings. 


Unfortunately if users decide to take their trades off of Poshmark, the app’s protection policy no longer applies, and of course, there’s no way to one hundred percent guarantee that somebody won’t purchase the 3 dollar listing before the person it was intended for gets the chance to, as anybody who has favourited an item is notified by email when the price drops.


Though it gives users the feeling that they are the merchant, the ultimate merchant in this process is, in fact, Poshmark. The app takes about a 20 percent cut of each sale made using its platform, so despite the various benefits, some users interested in clearing out their closets end up looking for other ways and other apps to get rid of their clothing.


In the end, though, the users who end up sticking with the app can make hundreds of dollars off of their closets, and many decide that the benefits outweigh the drawbacks. 

Credit Card Machine

When you swipe your credit card through a credit card machine at a store, you are putting your card at risk for security breaches and for people having the ability to steal your credit card information and to make charges to your account.

In addition to the security risks that the magnetic stripe poses, having a credit card that swipes can also lead to the magnetic strip eventually wearing away after being swiped through machines repeatedly and not being as efficient or effective anymore.

That’s why many banks and credit card companies are making the change over to cards with chips, also known as EMV cards, which have been designed specifically to prevent fraud and increase a customer’s security when they swipe their cards through a credit card machine.

The chip creates and encrypts a new, one of a kind, and completely unique code for every single transaction that a customer makes in order to help prevent fraud from occurring. Instead of swiping your card, you insert it and allow the credit card machine to read and exchange information with the chip.

Credit card information can also be put at risk without even running your card through a machine. Money and account information can also be stolen through online shops that are not legitimate.

Many of these stores gain popularity through taking images of various products from fully legitimate Australian online boutiques, putting them up as their own, and pricing the items as significantly less expensive than the original items. They then create viral social media posts by purchasing retweets from popular Twitter accounts with large followings, which helps them to grow the following on their own account, which makes them appear to be more legitimate and well-established than they actually are.

Many Twitter users, who are often times young, see these expensive-looking products listed at much more affordable prices (usually listed as being “on sale for a limited time only”) and they are quick to charge their parents or their own credit or debit cards.

After waiting eagerly for their fashion-forward apparel to arrive, some of these users end up disappointed, as the company manufactures cheap, poorly assembled products that typically do not even resemble what they ordered. From receiving clothing in completely the wrong size, the wrong colour, to clohting that is falling apart, or even a completely different clothing item, these customers feel ripped off.

Unfortunately, the rest of of these young customers never even see the products that they ordered. After placing their orders, they receive a purchase confirmation email indicating that their card has been charged, and that they will receive a second email when their order finishes processing and is being shipped. A majority of the time, the second email never arrives, because the product never ships, since it does not actually exist. The company then has the customer’s money and card information, and they are quick to delete their websites and accounts, leaving these customers with nobody to pursue about their orders or requesting refunds.

Credit Card Processing On Venmo

Venmo is changing the way that millennials exchange and spend their money, because they can pay each other back with just a tap on their smartphone. 


 A new user signs up for Venmo by registering through either their Facebook page or their email account, and then by linking in their credit card for processing when they use the app. They can then pay other users on the app by searching their usernames and simply typing in the amount, then pressing “send”. Users can also request money from each other.


Venmo is especially popular in university campus environments. Roommates can easily split the cost of shared items by “Venmoing” each other for the other half of the price. When a group of friends are out to dinner, the check no longer needs to be split, because everybody at the table can just Venmo one person. Processing the charge from one account to another is instant, and the money is taken off of one person’s credit card an added to the other’s Venmo balance right away.


On campus organizations are also now adopting the app in order to increase sales for their events and to make getting involved much easier. When fraternities and sororities hold their events, they give the option of paying with cash or with Venmo, which helps to attract attendees outside of the Greek system who would not have known to carry cash in order to purchase a ticket to their events.


The ease of the app makes it so that university students no longer have to carry their wallets on a day-to-day basis, since cash is barely used anymore and students are now able to essentially carry their credit cards for immediate processing through their smartphones.


Venmo also has a social aspect to it. Users of the app are able to label and caption the charges and payments that they are making, and their friends who also use the app are able to read these captions (but not view the specific amounts that have been paid for privacy and safety reasons). This “news feed” of charges and payments creates an effect that borderlines being a form of social media. 


A person’s Venmo balance accumulates over time as their friends transfer money to them on the app. When somebody makes a payment, their balance is first charged, and if their balance is 0, then their credit card is charged for processing the payment. Users can also withdraw their Venmo balance and deposit their funds onto their credit card or into their bank account, with a processing time between 1 to 3 business days.


With its user-friendly interface, its instant processing, its ease of use, and the social aspect of the app, Venmo is quickly becoming more and more popular and its use is becoming more and more widespread. Clever captions fill the homepage, and friends and classmates are able to charge each other and pay each other back instantly with just the click of a button. 

Debit cards are a popular way to spend money in lieu of cash.  A debit card has direct access to your bank account and usually has spending limits and with draw limits at ATM’s of $300 per day.

But, the problem with debit cards is, even though in most cases, they are protected against fraud by your bank.  If you are using an EMV enabled debit card, you have more protection against fraud.  If your account is breached and money is taken from your account, that is your money.  It could take weeks or months to reclaim the money and have it put into your account.

If you use a debit card there are several things you should watch out for to keep your account safe.

  1. Bank Atm’s in lobbies after hours are not safe, do not use them. Thieves have been known to install skimming devices on the door locks where you insert your card to unlock the doors for access.  If you must use an ATM like this, insert a credit card to unlock the door, so there is no opportunity for people to access your bank account.
  2. Off brand ATM’s are very popular, in convenience stores, public event centers, etc. They are also a prime target for skimming devices that can steal your cards info and drain your bank account. Avoid them at all costs.
  3. Do not link your savings account to your debit card for an emergency. A single fraud incident could drain your savings as well as your checking account.
  4. Pre-paid cards should be used for online transactions. If you insist on using a debit card for online transactions, go purchase a reloadable debit card for online transactions.
  5. Change your pin code every month
  6. Never put your pin in your phone. More and more, our phones hold all of our personal information.  If you lose your phone, your identity is at risk.
  7. Your bank will offer you text and email alerts that will let you know if something strange is going on. Set them up with the bank.

Using all of these steps will not completely protect you from all fraud, but will give you a head start to protecting yourself from card fraud and identity theft.

Setting up shop to offer your products or services online and using Authorize.Net to accept payments are great first steps towards attracting new customers for your business. Still, many businesses face a constant challenge of attracting new and existing customers to their websites.

Here are six ways to drive more traffic to your site, potentially increasing sales and online success.

Create a Strong Opt-In Offer

Building a strong e-mail list is one of the first steps to online sales success. In order to build a list, though, you’ll need to do more than just ask visitors to sign up for e-mails. You’ll need to incentivize them to do so. How? Use an opt-in offer such as a discount or coupon code. For example, you might give all new e-mail subscribers a special code for 20 percent off their first purchase on your site. Of course, you’ll need to promote your offer both on your website itself and through your social media profiles.

Using MailChimp is an easy way to stay in touch with your customers and generate repeat business. Plus Authorize.Net customers get six free Inbox Inspections ($28 value) and free Advanced Reporting ($49 value) automatically added to their account.

Build a Sense of Urgency

A highly successful sales tactic is to make customers feel as though they have to buy your product now. Talented sales people can do this in-person, but it’s possible to pull it off online too. You can create urgency among customers by offering limited-time coupons and discounts, counting down available inventory of popular items, offering freebies for visitors who buy products by a certain time and advertising flash sales that last for 24 hours or less.

Create Sharable Content

You’ve spent a lot of time refining the product pages of your website, but it’s essential to pay attention to your blog and social media opportunities too. Instead of broadcasting information about your products exclusively, share free info or tips that customers will be drawn to naturally. Linking to a helpful article orwriting a quick post with tips related to your industry appeals to new and old customers alike. The trick is to create content that your viewers will not only want to read, but will feel compelled to share with friends and co-workers too.

Incorporate Responsive Site Design

To provide your customers with the best experience possible, consider incorporating responsive design into your website. What does that mean? Put simply, it means that site visitors will have a high-quality browsing experience whether they’re using a desktop, laptop, tablet or smartphone. The goal is to make sure that potential customers can easily browse your products and complete an order no matter the device they happen to be using.

Post Your Customer Reviews

Posting customer reviews on your website itself and on your social media profiles will help to engender a sense of trust with shoppers. After all, people want to know what others think of your products before they buy. Of course, it’s important that you’re careful not to edit or cherry pick your reviews. Don’t hide negative reviews but respond promptly, clearly and professionally so that potential customers know you’re serious about fixing problems and meeting their needs.

Make Paying Easy for the Customer

Once you get them to your site, you want to do everything you can to make it easy to purchase. If you have the type of business that has repeat customers, you can reduce shopping cart abandonmentand make it easier for customers to pay by using Authorize.Net’s tokenization service, Customer Information Manager (CIM). By securely storing your customers’ payment data with CIM, you eliminate the need for customers to re-enter information for every subsequent transaction, providing a quicker checkout process.

For more business tips and advice, visit the Authorize.Net blog weekly. Have a great small business tip or want your business to be featured with your small business advice? Submit your story.

Wedding season is in the air and Authorize.Net merchant Raymond Miller of My Wedding Reception Ideas, shares his small business advice including what inspired him to start his business and what lead to its success.

“You can have everything in life you want, if you will just help other people get what they want.”
– Zig Ziglar

This Zig Ziglar quote inspired Raymond Miller, founder of My Wedding Reception Ideas, to create a business that helps couples prepare for what can sometimes be one of the most stressful times of their lives. Thirteen years later, My Wedding Reception Ideas has helped thousands of couples make one of the most important days of their lives more special and memorable.

How did you get the idea to start your business?

My Wedding Reception Ideas was conceived in 2003 when a friend asked me if they could use my fruit press to press grapes. They were making homemade wine to hand out at their wedding the following year. On the way home that evening after pressing grapes with my friend and her fiancé, I thought to myself, what a wonderful business it would be to help couples make one of the most important days of their lives even more special.

We’ve now helped thousands of couples make their wedding day extra special AND make the process as stress-free as possible. At the end of every day, my staff and I take great pride and satisfaction in knowing we are part of so many lives at such an important time of their lives.

What kind of items do you have at My Wedding Reception Ideas?

At My Wedding Reception Ideas, you will find an exquisite collection of wedding décor, gifts, stationery and accessories perfect for weddings and receptions. We invite couples to create their dream wedding with our creative and customizable wedding decorations, favors and reception gifts to add a unique and personal touch to their special day.

What is your small business advice?

Always give a little more than you promise. Don’t set customer expectations higher than what you can provide, be it service, product quality, or shipping. For example, let’s say it takes four business days to normally turn your product around or provide your service, add an extra day and tell the customer that it may take 5 business days. This does two things; 1) an extra business day allows for any unforeseen delays; and 2) your customer will be elated when they receive their product or service faster than what you originally promised.

To find out more about My Wedding Reception Ideas, check them out at

For more business tips and advice, visit the Authorize.Net blog weekly. Have a great small business tip or want your business to be featured with your small business advice? Submit your story.