Credit card processing as it should be - Straightforward and simple

Understanding Credit Card Processing Fees

Whichever credit card processing service you choose, that provider will be basing its processing rate on two sets of fees, Connection and Interchange Fees. Connection fees are individually set and determined by the processor or service provider and are often quite complicated. They are often set up in such a way to benefit the processor at the merchant’s expense through various added surcharges and hidden fees. These are often buried within seemingly simple plans like All-Inclusive Rates, Bundles or Tiered Rates. Interchange fees are preset and published by major card associations like VISA and MasterCard who share these fees with the card issuing bank.

Interchange fees consist of three main components

1. Discount fee, a designated percentage of the sales transaction amount
2. A preset Per Item transaction fee
3. Association Assessment fees, also set to a particular percentage of the sales amount

Keep in mind: interchange fees are nonnegotiable and merchants, regardless of their size or reach, will be charged these fees. Since these fees simply cannot be lowered or eliminated, connection fees become much more important to merchants evaluating processors, especially for merchants looking for opportunities to control expenses.

The chart below shows how credit card fees are determined based on the combination of both Interchange and Connection fees. Enablest’s Cost-Plus approach enables our member merchants to get the most cost-effective credit processing rate based on the various types of credit cards they might receive from customers.