Payment Processing Fees & the Factors Affecting It!

If you’re not aware about the online payment processing, you would not know that there is a certain fee applicable on every transaction made online through the debit card or credit card, which is called as payment processing fee. It is the cost that business owners incur when processing payments from customers. It may vary according to the level of risk of the transaction, type of card, and the pricing model preferred by specific payment processors.

Here are different factors that affect payment processing fees:

Interchange rate – It refers to the amount that is charged by the credit card issuer from the receiving bank every time a customer pays using a credit card. The fee is set by each network, and they vary depending on the issuer. It is affected on the type of card, the risk level of the merchant’s business.

Merchant account provider fee – When you create a merchant account, you are required to pay some charges on every transaction. The higher the merchant account fee, the higher are going to be the charges for payment processing.It is charged by the merchant account provider on top of the interchange fee depending on the volume of transactions done online.

How the card is processed – Another common factor that makes an impact on the payment processing fees is how the card is processed to make the payments for a product or service. The customer are able to make in-store transactions by swiping their card, over-the-phone transactions as well as online transactions. The mode they select, will decide the payment processing fee. Online transactions and phone transactions attract the highest fee as they carry the highest risk.

So, when you plan to start accepting payments through the credit or debit cards online or in-store, it is important to keep the above mentioned factors to understand the payment processing fees you are going to pay for the transactions made. It is suggested to pick the best payment gateway to ensure getting the complete safety while reducing the charges applicable on every online or offline transaction.