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Everything You Need to Know About Merchant Processing Fees

What are merchant Processing Fees? 

Every business owner needs to make a profit. That’s why it’s essential to have an understanding of the various fees that come with accepting credit card processing. One of the significant expenses associated with accepting credit cards is merchant processing fees. In this article, we’ll take a deep dive into what merchant processing fees are and how they can affect your business’s bottom line.

What are merchant processing fees?

Merchant processing fees are the costs associated with accepting credit card payments from your customers, often referred to as credit card processing fees. Every time a credit or debit card is processed, the merchant processing fee is applied. These fees are usually calculated as a percentage of the transaction. The fees are paid to the issuing bank, the card network, and the merchant processing company.

The specific fees a business owner will be charged for processing credit cards can vary depending on several factors. These can include the type of payment processing service the business uses, the industry, the card type (debit or credit), and the transaction amount. Some providers may also apply additional fees, such as payment gateway or monthly account fees.

How can you lower your credit card processing fees?

One way to lower merchant processing fees is to shop around for a reliable payment processing provider. You can compare fees, features, and services offered by various payment providers before settling on one that best suits your business needs. Another way to reduce merchant fees is to negotiate with your provider. You may have more bargaining power if your business has a high volume of credit card transactions.

Fraudulent transactions and chargebacks can also result in merchant processing fees. Chargebacks occur when a customer disputes a charge on their credit card and results in the business being charged additional fees. To minimize chargebacks, it’s essential to have proper policies in place, such as clear refund and return policies and detailed descriptions of your products and services.

Merchant processing fees can be a significant expense for any business that accepts credit cards. It’s essential to have a clear understanding of what these fees are and how they’re calculated. By finding the right payment processing provider, negotiating fees, and implementing policies to avoid chargebacks, you can keep your merchant processing fees low and minimize their impact on your business’s bottom line.


For a complimentary review or your merchant processing statements and fees, contact Bay State Merchant Services today. One of our certified payment processionals will perform a thorough analysis and take the time to explain your current rates and fees while looking for opportunities for costs savings.

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