Transcribed

## Credit Card Processing Fees

CREDIT CARD PROCESSING FEES Credit Card Processing is a convoluted space, and most businesses do not know what or who they are paying with credit card processing fees. Each time a business processes a Credit Card, it pays a fee to 3 different places: %3D Card-Issuing Bank Credit Card Payment Processor What exactly ARE these fees? Fees to Bank = Interchange Fee %3D ex: 1.51% volume + .10¢/transaction NON-Negotiable Fees to Credit Card = Assessment Fee Visa = 0.11% volume + .0195¢/transaction Master Card = 0.11% volume + .0185¢/transaction ニ Discover = 0.105% volume + .0185¢/transaction Fees to Processor Transaction Fees = .38 - 1.98 volume, + .20¢/transaction Negotiable Monthly Fees = \$0 - \$20/month Annual Fees = \$0 - \$160/year So, let's see where the money goes... with a simple transaction. In this example, Tom uses his Credit Card to purchase a \$20.00 tub of mustache cream. *NOTE: Since processor fees are negotiable, they vary considerably. In this example, we used an average rate. 1 Tom Decides to purchase his mustache cream for \$20.00 2. Tom Swipes his card through a payment processing terminal \$20 Processor eventually collects 39.6¢ *assuming .98% volume + 20¢/transaction rate 3. The processor's card reader discovers Tom's Credit Card issuing bank 4 Tom's bank "Loans" \$10 to the merchant's bank Merchant bank deposits \$19.57 in the merchants bank account 2-4 days later (known as the “settlement") Tom's card-issuing Tom's Credit Card Total fees taken bank collects: company collects: from business: 40.2¢ Cinterchange fee) 2.2¢ 82¢ (assessment fee) with a \$20 transaction Sources: http://boss.blogs.nytimes.com/2013/03/26/my-search-for-reasonable-and-understandable-credit-card-processing/ http://credit-card-processing-review.toptenreviews.com/ http://www.truemerchant.com/infographic-credit-card-payment-processing-how-it-works/ http://www.cardfellow.com/content/credit-card-processing-guide.php http://usa.visa.com/merchants/operations/interchange_rates.html http://www.mastercard.com/us/merchant/pdf/MasterCard_Interchange_Rates_and_Criteria.pdf 10TopTenREVIEWS TM

# Credit Card Processing Fees

shared by Imbermining on Aug 28
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This awesome infographic explains just how credit card processing works. From where the money goes, to how much is charged per purchase.

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TopTenREVIEWS

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Economy
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