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  • Writer's pictureLouis DiMeglio

Understanding Merchant Services Fees

When you accept credit cards as a form of payment, you will incur merchant services fees. These fees are charged by the credit card companies and the merchant services provider that processes your payments. Merchant fees can vary depending on the type of card, the amount of the transaction, and the merchant services provider.


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There are two main types of merchant fees:

  • Interchange fees: These fees are charged by the credit card companies to the merchant services provider. They are based on the type of card and the amount of the transaction.

  • Merchant service fees: These fees are charged by the merchant services provider to the merchant. They cover the cost of processing the payments and providing other services, such as customer support.

Merchant fees can be a significant cost for businesses, so it is important to understand how they work. Here is a breakdown of the different types of merchant fees:

  • Interchange fees: Interchange fees are the most common type of merchant fee. They are charged by the credit card companies to the merchant services provider, who then passes them on to the merchant. Interchange fees are based on the type of card and the amount of the transaction. For example, a credit card transaction with a Visa Classic card may have an interchange fee of 1.5%, while a transaction with an American Express Gold card may have an interchange fee of 2.5%.

  • Merchant service fees: Merchant service fees are charged by the merchant services provider to the merchant. They cover the cost of processing the payments and providing other services, such as customer support. Merchant service fees typically range from 0.25% to 1.5% of the transaction amount.

  • Other fees: There are a few other types of merchant fees that you may incur, such as:

    • Setup fees: These fees are charged by the merchant services provider when you set up your merchant account.

    • Monthly fees: These fees are charged by the merchant services provider on a monthly basis, regardless of the number of transactions you process.

    • Chargeback fees: These fees are charged by the merchant services provider if a customer disputes a charge.


The total amount of merchant fees you pay will depend on the type of card, the amount of the transaction, and the merchant services provider. It is important to compare different merchant services providers to find the one that offers the best terms for your business.

Here are some tips on how to reduce merchant fees:

  • Choose the right merchant services provider: When choosing a merchant services provider, compare different providers and their fees. Look for a provider that offers a competitive interchange rate and low merchant service fees. Get the quoted fees in writing and ask if the merchant services provider offers a price guarantee. At PayTech Trust we always make our offers in writing and provide a lifetime low price guaranty.

  • Consider a flat-rate pricing model: Some merchant services providers offer a flat-rate pricing model. This means that you pay a fixed fee per transaction, regardless of the type of card or the amount of the transaction. This can be a good option if you want to avoid the variability of interchange fees. At PayTech Trust we offer numerous pricing models and work with you to determine which best fits your business.

  • Negotiate with your merchant services provider: If you are not happy with your current merchant fees, you can try to negotiate with your merchant services provider. You may be able to get a lower rate if you agree to a longer contract term or if you process a certain volume of transactions. At PayTech Trust we can help you negotiate with your current provider or move you to a new one, if that's the better option. Contact us for more information on how we can help.

By following these tips and working with PayTech Trust, you can reduce your merchant fees and save money on your business expenses.

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