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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: 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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