Discover More Information About ACH Processing: What Type of Costs Will it Involve?

In case your business doesn’t accept credit payments, it could be missing out on significant sales revenue, especially if it sells consumer services or products. If you sell consumer products or services, the reason to accept credit payment is obvious: even with tighter credit restrictions following the recession, credit remains many people’s favorite way to spend, and that includes ACH payments. There are, however, some things to prepare as you search for a credit card processing account with a merchant service, one of which is merchant fees. Down below, we identify merchant fees/charges that are paid along with tier pricing costs (e.g. 3-Tier or 6-Tier).



1. Authorization Expenses



Authorization service fees are charged every time a transaction is authorized by the bank that issued the charge card and initiated the transaction, whether or not the "request" is approved.



2. Statement Fees



A statement cost is normally thought of as representing the expense of submitting a paper statement in the mail, however it’s actual purpose would be to account for general overhead, as even electronic statements usually include such expenses.



3. Monthly Minimum Fees



A monthly minimum fee is charged whenever a merchant fails to accrue enough fees to fulfill the minimum amount of money it must pay every month. When a customer fails to meet the specified amount, their monthly minimum service charge is automatically bumped up to fulfill it, a practice that enables the account provider to keep up profitability.



4. Batch Expenses



A Batch fee-also referred to as batch header-is charged when a business transmits its daily transactions to its bank for payment, a procedure known as "settling" or "batching" its terminal. If it is not completed by the end of the 24-48-hour cycle, a batch fee may increase.



5. Customer Service Costs



A customer service fee may be charged to help pay for customer service. Don't assume all merchant services charge it.



6. Annual Fees



Many providers levy an annual-and sometimes quarterly-charge that helps to pay for the price of maintaining your account, such as various types of IT maintenance. The charges range by account type and merchant service, with a range of $50 to $500 being common.



7. Early Termination Charges



In case you terminate your merchant account ahead of its specified end date, expect to be charged for the early cancellation. Most of the time, a charge for early termination is really a combination of other charges relating to the unfilled portion of the contract period, including monthly minimum and statement charges.



8. Chargeback Costs



Chargeback fees occur when the merchant’s processing bank is left responsible for refunding a cost to a business or consumer, the quantity of which it previously paid to the merchant. Generally, a merchant is permitted to maintain a certain percentage of their overall dollar volume in chargebacks (usually around 1%). If the percentage is exceeded, large charges (typically starting at $5,000) are levied.



While conducting research for this article, I learned about how to accept online payments and merchant account providers at www.avpsolutions.com.