Keeping accurate records of your processing fees can help you make the right decisions for your business.
There are a variety of merchant accounts to choose from, and each has its own rate and qualification requirements. Explore non-qualified rates, monthly fees, monthly minimums, and contract or cancellation fees before making your choice.
Certain credit cards cost more to process than others. It’s up to you to choose what works best for your business.
Be wary of service providers that charge a fee for contacting customer service. If your system isn’t working, you should be able to get help without paying extra for it.
There’s no avoiding it – if you accept credit and debit cards, you’ll have to pay credit card fees. Keep accurate records and audit them regularly to evaluate the cost-effectiveness of your choices.
Process credit card payments while keeping accurate accounting records – all in one place.
|Pay as you go|
|Bank Transfer (ACH)||Free|
|Card - Invoiced||2.9% + 25¢|
|Card - Keyed||3.4% + 25¢|
|Pay as you go|
|QuickBooks Online||$0/moGet started|
| Bank Transfer (ACH) |
You process a Bank Transfer payment in QuickBooks or a customer pays an invoice online with a Bank Transfer payment.
| Card - Invoiced |
A customer pays an invoice online with a credit card.
|2.9% + 25¢|
| Card - Keyed |
You manually enter a credit card number or set-up a recurring credit card payment.
|3.4% + 25¢|
Most of your costs will be transaction processing fees. Your rate per transaction is determined by your personal and business risk, percentage of card-absent sales, average dollar amount per sale, and total dollar amount of monthly sales. Lowering your transaction risk will also lower the rate you pay.
To get the best rate for the way you conduct business, be sure you understand the rates and qualifications around each type of sale.
Qualified rate is the percentage rate that’s charged whenever you accept and process a regular card using an approved processing solution. This is usually the lowest rate you can receive, and it’s often what you’ll be quoted when you inquire about rates.
Mid-qualified rate is the percentage rate that’s charged if you accept and process a card that doesn’t qualify for the lowest rate. This may happen when you manually key a card into a terminal instead of swiping it, or if a rewards or business card is being used.
Non-qualified rate is the percentage rate that’s charged whenever you accept and process a card that doesn’t qualify for either qualified or mid-qualified rates. This may happen when a card is manually keyed into a terminal versus being swiped, address verification isn’t performed, information is missing, or the authorization is not settled within the allotted time frame (usually 48 hours).
A rate increase, otherwise known as a downgrade, occurs when your transactions don’t meet the requirements for the lowest or qualified rate. To mitigate the number of downgrades you receive, make sure your transactions meet the qualification requirements to get you the lowest rate available for every transaction. Train your staff to do the same. Secondly, train closing and opening staff on how to audit transactions totals for errors and close out daily credit card transactions at the end of each day.
Batching means settling the charges to your terminal by sending the completed transactions for the day to the acquiring bank for payment. To make sure you get the best possible rate on all your daily transactions, you must “batch out” within 24 hours. If you don’t, you may raise the risk of dispute and cause your transactions to be downgraded. Remember that dial-up connections are prone to dropped lines and duplicate charges.
The interchange fee is a percentage of the transaction and helps to cover authorization costs, fraud, and credit losses. Most merchant service providers include the interchange fee in their bundled rate, which makes it more difficult to identify specific rates. Ask your provider if you can pay the interchange fee as it is incurred. This will prevent you from paying more than you need to and help you keep better track of your transaction costs.
A chargeback occurs when the cardholder disputes a transaction and it’s returned to the acquiring bank. If you don’t respond promptly to a chargeback inquiry, you may have to pay a timeliness fee or lose the entire sale. Be sure to ask your prospective provider how it deals with chargebacks and what costs are involved.