Know your fees, gain the upper hand
Whether you’re on the lookout for a first time merchant account, or are shopping around for a new provider, it pays to find out all you can about the different fees involved in the application. Knowing this can give you the upper hand in negotiating and grabbing a good bargain – ultimately saving you a lot of money in the long run. Some merchants have been known to call up their merchant account provider and ask for a reduction in fees per year, and in doing so, were successful in shaving off up to $100 annually. There are people who scoff at this amount but each dollar saved, is a dollar gained! If your provider are not willing to reduce some fees, perhaps it’s time to go shopping for a new one? The industry is so competitive – negotiating with just about anyone you do business with, whether it is a merchant account provider or a payment processor, is a given.

Monthly Minimum: Like its name implies, this is the absolute minimum you have to cough up each month. If you meet or exceed the minimum set by your providers, then you’re fine. But if you cannot meet the minimum amount set, you will be charged a little extra so that you can meet the minimum mark. Most monthly minimum fees are very reasonable but if you find that your monthly volume is a little on the lower end, you could always negotiate with your provider to reduce the minimum.

Annual Fee: This is what you usually pay to maintain your merchant account. Some providers waive it from the start and some eventually waive it later on. Expect to pay $20 to $80 a year if you don’t ask for it to be levied.

Chargeback Fee: Deemed a necessary evil, chargeback fees can typically range from $25 to $40. Merchants are usually slapped with a chargeback fee if a customer who has reported a dispute against you, and wins it. However, if you succeed in providing proof that the customer did indeed willfully make the purchase himself, then the chargeback fee will be levied. Don’t underestimate this fee. Too many chargebacks can cost you your merchant account!

Voice Authorization Fee: Merchants are charged this sort of fee when and if they call their processor to complete the transaction over the phone. Don’t worry about this if you have a reliable payment processing software which automates almost everything.

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