Merchant Services Transaction Fees: Understanding Authorization Fees for Credit Card Transactions

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In addition to paying a percentage rate when accepting credit cards, there are also transaction fees. Sometimes, multiple transaction fees can be charged on the same transaction. Here is an explanation of the fees found on a merchant services or merchant processing statement.

Transaction Fees on a Credit Card Processing Statement

In addition to paying a percentage of the dollar amount of the sale, the merchant pays a transaction fee. This fee ranges from $.02 to $.45. Some processors offer a reduced transaction fee for merchants who process small ticket sales (e.g. ice cream parlor, coffee shop, doughnut shop, diners).

American Express (AMEX) is almost always separate, but often, the processor will charge a transaction fee in the range of $.10 to $.35 for AMEX transactions. American Express then bills its rates (a percentage of the sale amount) separately.


What are the MC Network Access Usage Fees and Visa Authorization Processing Fees?

“AUTH” on a merchant services statement is short for “authorization.” For more information on abbreviations on credit card processing statements, see Credit Card Processing Statement Explanation: Understanding Abbreviations & Meaning of Fee Types.

The MC Network Access Usage Fee is currently an additional transaction fee of $.0185 from MasterCard. This is a surcharge of roughly two cents.

The Visa Authorization Processing Fee is currently an additional transaction fee of $.0195 from Visa. This is a surcharge of roughly two cents, as well.

Sometimes, there are also additional authorization fees for Discover and American Express as well.

Debit/Check Card Transaction Fees

Debit and check cards sometimes have a lower percentage rate charged than the qualified rate, but the transaction fee is often higher. For example, if the transaction fee is $.10, then the debit transactions might be $.15 or even $.25.

Debit cards that are processed as a pin-based transaction will have 0% rate plus a flat $.50. Processing the debit and check cards this way generally makes sense with ticket sales over $20. If the sale is smaller than $20, then it is usually less expensive to run the card as a credit card.

AVS and Other Authorization Fees

AVS stands for address verification system and represents a surcharge per transaction using this system. This is a good idea for merchants to use, especially for sales with a high dollar amount as it reduces risk of fraud.

Other transaction fees are surcharges for different types of cards, as well as international credit cards. Surcharges also apply for most online access services.

It is normal in the credit card processing industry to charge transaction fees. It is also normal that they vary. However, if there are gross inconsistencies on the merchant services statement, then call the processor and ask about the items in question.

Make sure that when receiving a quote from a competing processor to ask about the transaction fees as well as the percentage rates.