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.

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