RE: If customer A is paying their invoice for $100, and the merchant fees (let's say 3%) get taken off as the customer pays, how do I process that fee?

The payment and the fee are two different transactions.

Record the payment of $100, as usual and apply it to the invoice.

Later, when you are charged a fee, record that fee. Using the QB Merchant service, you can have the fees taken out each day or once a month - which is much easier to deal with.

- Where the fees are daily, they are added as negative line item to each batch/deposit

- Where the fees are monthly and not connected to a daily deposit, they're added to your bank register as a payment.