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A merchant account is a type of bank account created in order to facilitate debit/credit card transactions. In case of firms who sell online and accept payment via cards, merchant account serves as the agreement between the bank, retailer and the card payment processor. Credit card merchant fees thus, are a series of payments depending on the agreement between the merchant and the bank which needs to be paid. For example, if you have started sale proceeds online, you would find a number of credit card merchant processing fees in collecting an online payment. For example, apart from an online merchant account you would also have to pay fees to the numerous vendors for each component of the process, such as the site host, payment gateway, the processing service, etc.

Credit card merchant fees are of various types. Firstly there is the application fee for applying for a merchant account and thereafter a set-up fee in order to get the account activated and for a secure payment getaway. A membership fee is also common which can be either annual or monthly and has to be paid for accepting credit cards in certain industries. It can also become a major component of your fee structure if you start your merchant account through a trade organization. Thereafter, you might have to pay separately for using a secure server for your transactions or it may also be included in your monthly fees to the payment gateway processor. An additional fee known as the discount rate is also charged for processing each credit card transaction and varies in amount depending on the dollar amount of the transaction being done. This is mainly for risk covering purposes and since online transactions carries greater amount of risk than retail ones, the discount rate in this case is always higher. Fixed transaction fees can also be present where a fixed amount is charged over on each transaction in addition to the discount rate. Other credit card merchant fees include payments like address verification service, which is paid for checking customer’s credit card number with their mailing addresses, penalties for cancellation, reversal fees in case the buyer reverses a transaction or rejects a charge, etc. Thus, it is seen that credit card merchant fees is a series of such fees which vary in number and type from an agreement to agreement. Hence, discussing, and clarifying at length to understand about all such fees before entering into the merchant agreement is the best strategy to follow.