Internet merchant account providers are not always forthcoming about their fees. Sure, they won’t really lie to you about anything, but a half-truth is just as bad, right? Most of their fees will be hidden deep within the fine print that no one really reads, or behind a labyrinth of links that very few can manage to navigate. So we decided to make it easy for you, by revealing all the hidden fees you can expect to encounter as you live your life with a merchant account.

Transaction Fees

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These are the ones account providers are most open about. They have no reason to hide it anyway, considering it is usually chump change – a fixed charge of $0.15 to $0.30, depending on the account provider and the card used for payment. This is irrespective of the total transaction value.

Set-up fees

If a merchant account provider promises a $0 set-up fee, turn around and run as fast as you can (or just navigate to another site). More often than not, these are scammers out for your money. If they are not, they will recover the money via other hidden fees anyway. Set-up fees can go up to $200.

Credit Card related fees

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These include fees for application, yearly membership, gateway access, monthly statements, etc. Besides, there are penalties for cancellation/termination of your account, something you don’t usually realize till the time you really want to close the account. There are transaction fees (discussed above) and reversal fees. Reversal fees are charged when a customer issues a chargeback. There is also a (usually hidden) fee for Address Verification Service, something that cross-checks your customers’ credit card number with the mailing address. And then there’s the non-qualification transaction fee, something that is levied on payments not made by credit cards accepted by the merchant account provider (usually Visa, MasterCard and American Express).

Assessment fee

This is levied by Visa/MasterCard and conveniently passed on to the account holders by merchant account providers. Thankfully this is a small fee, usually about 0.1% of the transaction amount (so for a $10,000 transaction you pay just $10). MasterCard is a little more evil, though, and levies up to 0.8% of the total transaction as assessment fee for cross-border payments.

Discount Rate

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Probably the worst offender when it comes to looting you of your money, but not really a hidden fee. Usually hovering around the 3% mark, it is the amount of total transaction value that you will pay to your merchant account provider.

Minimum monthly discount fee

This is the least amount of discount fees you will be paying to your merchant account provider. If the total value of your transactions (received payments) in a month is less than this floor value, you will need to cover for it from your own pocket. So, for example, if your minimum monthly discount fee is $100 and, continuing with the previous example, your discount fee is 3%, you will need to sell about $3350 worth of goods/services in a month. If you manage to sell $3000 worth of goods/services (discount fees of $90), you will need to pay an additional $10 to your merchant account provider for failing to meet the minimum monthly discount fee.

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With this information in hand, you are much better prepared to open your own merchant account. Remember, if any provider promises you ridiculously low fees, the provider is going to cover for it with hidden fees.