Merchant Services Fees Structure Explained

The majority of businesses today use some sort of payment processing software and there are some fees which should be paid by merchants for their services. In order to be able to choose a payment processing platform which will offer you the best pricing model you need be aware of the merchant services fees structure. They consist of the three groups of fees: interchange fees, flat fees and subscription fees.

Interchange fee includes interchange fee itself (the percentage from the processed transaction) and per-item fee (some set amount paid for every processed transaction). Usually interchange fees constitute the most significant part of the merchant services fees that’s why sometimes they are also called processing costs in general.

Flat fee is charged when some certain types of transactions take place such as chargebacks, declines or ACH returns. It can be either the amount applied to processor by association and passed to the merchant or a fixed amount charged by the processor.

Subscription fee is charged on the regular basis for some specific services (for instance, PCI compliance) or for merchant account usage. This fee is optional and usually it is not charged when merchants have high processing volumes.

All the above mentioned fees are traditionally paid by merchants but there is one more type of fees, credit card convenience fees, which can be used when merchants are not able to cover processing expenses on their own due to the peculiarities of their business. When credit card convenience fees are used the processing costs are passed to the cardholder and processed either as a part of the original transaction or as a separate transaction (the first option is considered to be a preferable one).

So, while choosing a payment processing solution for your business you need to analyze the pricing model offered carefully taken into account merchant services fees structure. If you are interested in some additional information on this issue you can read the publication at #UniPatGateway.

You can also visit Paylosophy Payment Advice Blog to learn more about some other features of payment processing software which should be considered.

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Enterprise-scale, open-source, #PaymentProcessing solutions for #Merchants, #PayFacs and PSPs. For more information, visit

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