How to choose a payment processor based on processing fees?

There are many credit card processing companies out there. And processing fees are based on a lot of different criteria.  From tiered rates, interchange rates and flat rate pricing.

The best place to start, is to read reviews and search the BBB to to get a better idea. Merchants need to be aware there are many hooks processors make their numbers. The best merchant service pricing is based on interchange in most cases. But there are many exceptions depending on the type of business.

Here’s what you should be paying for:

Interchange fees, discount rate, and transaction fee.

But fees depend on the credit cards that you take, and how the cards are being processed. They vary from “Card Not Present” (Ecommerce, Phone, Online) to “Card Present” (Retail). The “markup over interchange,” is usually called discount rate. In most cases, this is the percentage determined by the processor, and the transaction fee.

Monthly Fees.

The monthly fee, or on file fee is determined by the processor. But keep in mind that this fee includes customer support. And the on file fee and sometimes PCI compliance built in.

PCI Compliance.

The PCI compliance fee is a fee that is in most cases paid for. And this shouldn’t exceed $60 a year.

What you shouldn’t pay for:

Monthly minimum fee:

Is what the merchant service company charges if you don’t meet their monthly number of transactions.

Early Termination fee:

Make sure you ask about this. It’s often buried in the paperwork you sign when partnering with a company. You don’t want to have to pay this kind of fee.

Application and setup fees:

You should never pay a setup fee or application fee. Unless, you are signing up for a gateway or software application in conjunction. Or something equally complicated.

Batch fees:

Batch fees can be marked up to make extra revenue, but these fees are likely low, and should not exceed $0.30 cents a batch.

Questions to ask:

  • What fees am I going to be paying for the discount rate?
  • Is my price per transaction reasonable?
  • What is my monthly fee?
  • Is there a contract or early termination fee?

We offer a free statement analysis for businesses looking to switch. We’re also transparent with pricing. We’ll show you all the fees you would be paying upfront compared to your current provider.

Check us out online today: Contact Gulf Management for a Quote


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