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What Fees Are Included in a Credit Card Transaction? | Merchant Advocate

Last updated 6 years ago

Interest and convenience fees aren’t the only extra charges utilized by the lending industry. This article explores the role credit card transaction fees take in your monthly upkeep costs.

  • Transaction Fees:

Transaction fees earn extra money for lenders each time a purchase is made with a credit or debit card. Such charges comprise an “inquiry fee” and a “credit card rate.” The inquiry fee is a flat charge tacked on to each and every swipe of a card. Many lenders institute inquiry fees as high as 21 cents per swipe. The variable costs of a “credit card rate” are controlled by a number of point-of-sale factors.

  • Types of Charges:

Credit card rates are variables that define the total cost of transaction fees. A majority of credit card rates can be divided into two broad classifications. “Card Present” rates apply to businesses where payment is made through a physical credit card terminal. “Card Not Present” rates impact costs for mail orders, telephone purchases, and online charges. Rates are also determined by how quickly merchants communicate their transactions. Qualified transactions are processed within 24 hours and carry the lowest interest. “Mid-qual” transactions carry higher interest rates and require transaction processing within 48 hours. Non-qualified transactions take over 48 hours and carry heavy interest rates.

  • Fee Process Summary:

The charges associated with a “swipe fee” helps to repay a lender for credit card processing. This process begins with a swipe from a consumer card. Purchase and card number data travels to the credit card processor’s database. Consumer information travels from the processor network to the lender. The consumer’s account information is verified and the information is relayed back across the network. This results in an “APPROVED” message and another satisfied customer.

Merchant Advocate can help your business put a stop to extraneous fees. Reduce expenses on credit card transactions today with a call to (732) 727-2073.


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