One of the main factors that play into the process of obtaining and then maintaining a merchant account are the myriad of payments and costs involved. These expenses are known as merchant account fees, and they are charged to a business for the use of various merchant processing solutions and services.
These services include PIN and Address Verification Service (AVS) fees, monthly statement and support fees, internet and network access fees, and security and protection fees, in addition to a plethora of others. The cost of these fees will vary depending on the business involved and the merchant processing solutions provided. However, the largest and most significant of these fees are made up of what are described as merchant account discount rates.
In layman’s terms, a merchant account discount rate is the transaction fee assessed to your business for processing a credit or debit card payment from a customer. A large chunk of these discount rates are made up by interchange fees, which are the fees instituted by the major card brands (Visa, MasterCard, Discover) that account for the transaction costs for transferring money from one bank to another.
When it comes to processing online payments, there is a long line of people involved, including the buyer, the buyer’s bank, a credit institution, a payment gateway, the merchant’s bank, and the merchant. Merchant account discount rates refer to the percentage charged for processing credit card transactions and other methods of payment.
A variety of different payment processing companies provide merchant processing solutions that enable businesses to transfer payments between merchant and buyer via credit or debit card and other forms of payment.
Every time a business accepts a credit card as a valid form of payment for a transaction, they incur a fee issued by the payment processing company. This fee represents the merchant account discount rate. Each company offers different types of merchant processing solutions to their potential clients, and discount rates fluctuate from one company to the next, so it’s important that you’re aware of what services are being offered and at what cost.
The rates fluctuate based on a variety of factors, including card type, form of transaction, the amount of transactions, average price of transaction, type of business, security risk, and financial risk involved.
Average discount rates for payment processors tend to be between 1.0 and 5.0 percent, and these numbers climb even higher for online merchants, who are inclined to pay higher rates for online sales. However, we offer merchant processing solutions with rates as low as 1.5 percent for qualified businesses. In addition to being affordable, our premium services include different solutions that can adapt to businesses of different sizes. For small-to-medium-sized businesses, our QuickPay solution provides a simple, streamlined way to bring Allied Wallet security to your transactions, and is one of the best online merchant services for small business around.
Now that you have a better understanding of what merchant account discount rates are all about, you’re fully equipped to discover which of our services are best for you and your business.