In our previous article, we were able to discuss the 7 basic ways how you can minimize cost and “Don’t Overpay For Credit Card Processing In Your International Merchant Account.” We discussed the needs of understanding the various payment options made available by international payment gateways and in this current article, we shall take a closer look at the credit card processing fees charged on high-risk merchant accounts.
What are high-risk merchant account fees?
After your market-oriented research, you are most likely to come across wonderful credit card processing service providers, or perhaps you identified a card processor who seems to appear considerate and really cares about your business needs but the arrival of your first statement threw you off balance because you can’t seem to understand where all the charges are coming from. You may also want to make sure your business is not being billed or overcharged for something in error, but it is difficult to determine what all the fees are and why they are being applied to your account.
Apart from the usual processing rate, other forms of fees may apply to your transactions even without your knowledge. Taking your time to understand why each of these fees is deducted, the method used in calculating them and when they apply to your transactions can assist you to reconcile your statement each month. To gain a better understanding of how these things work, here is a summary of all the different processor fees which may apply to your transactions and appear on your statement.
Level 3 Data Processing: Every credit card transactions require a certain amount of data to be transmitted from your business to the acquiring bank. When you use a level 3 data processing, it needs more data to be sent to the acquiring bank than levels 1 and 2 respectively thus attracting more data processing fee than the others. The amount of money charged for Level 3 Data Processing is often reserved for merchants accepting Government, purchasing, corporate credit cards because of the extra data in the form of more detailed invoice data and itemized lists. This assists the account holder to have an accurate expense tracking with little or no help from outsiders.
Account Change Fees: When you want to change your account, some of the payment processors may require that you provide some additional fee to effect some specific changes to the account details. These changes usually include pertinent business information, banking information and addresses even though the high-risk merchant account processing fees may differ from one payment gateway to the other. This high-risk merchant account processing fees are used by the payment gateway to cover most of the administrative costs which are associated with effecting the changes on your account.
“Doing Business As” (DBA) Fee: This is the type of fee charged whenever you wish to change the name of the company you are doing business as. This may attract some administrative fees to make the changes on your payment processing account. The amount charged depends on the terms and conditions of the payment gateway. Remember to ask for a detailed breakdown of the amount to avoid surprises when the high-risk merchant account monthly fee lands on your table.
PCI Non-Compliance Fee: This is the amount charged on businesses which follow the data security standards spelled out in the Payment Card Data Security Standard (PCI DSS), and you will be considered as a PCI compliant. The best requirements for compliance with the PCI DSS varies according to your business, and if your business fails t meet these requirements, a PCI non-compliance fee may be charged by your processor.
PCI Compliance Fee: As already explained in item “v” above, PCI compliance is mandated by the major card brands (American Express, MasterCard and Visa card) as a part of their accepting credit cards policy. All these service providers, merchants and payment processors may charge a PCI compliance fee for any services they might offer to help your business stay compliant most especially in the way of customer education and assistance in becoming and remaining compliant. Apart from the apparent benefits of minimizing your exposure to high risk and fraud prevalent in the market, being compliant also comes with some forms of additional benefits which makes your business eligible for an extended data breach insurance coverage.
Chargeback Fees: This is the fee charged when a customer files a dispute about a transaction to get the funds returned to their account. The card brand will charge a fee to process the refund.
Terminal and Equipment Fees: This is the fee charged when you are renting or leasing the equipment needed for all your payment procedures and processing. This is usually calculated every month.
POS Software Fees: This fee is charged based on your point of sale system set up. You may be using a desktop or mobile application to access the additional features or run a virtual terminal or online store. The POS Software fees are charged as payments to access the added functionality.
NSF Fee: This is similar to your personal bank accounts. Whenever your processor is unable to withdraw the required amount from your account, it tends to bounce back, and you will be required to pay NSF fee for an unfulfilled payment.
Cancellation or Early Termination Fees: Some payment gateways require all account users to sign a lengthy contract which includes their high-risk merchant account termination fee to discourage them from backing out.
Cross-Border Fees: This is charged if your business card was issued outside the borders of the country you operate.
Address Verification Service (AVS) Fees: A tool which allows you to verify if the registered account matches with details of the credit card.
Gateway Fees: When you sign-up for an account through a gateway-only provider, your monthly statement will include a monthly gateway fee.
Voice Authorization Fees: Charged when you use dial-up telephone services to you obtain transaction authorization.
The total offshore merchant account fee charged depends on the merchant account gateway. Contact us if you have any question, we will love to hear from you.