Merchant Advisors Canada

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Below is a list of the most common fees associated with credit card processing.
Fees charged varies from different processors. Not all fees may be charged.
There are a number of merchant account fees and other costs involved in processing credit card transactions. Having a thorough understanding of these fees will educate and guide you when choosing for a merchant account provider. Knowledge is the key to keeping the cost of credit card processing down. Arming yourself with these key fact will ensure that you will get the best rates that the market can offer.

Remember that banks and merchant service providers are businesses too, with one goal in mind; making money and as much as possible from each and every client. Be very cautious when dealing with merchant service providers advertising rates so low they are unbelievable; most of the time they are unrealistic and many will inflate the non-advertised fees to make up for the loss in the advertised fees. Don't be fooled by those advertising lower than the real interchange rates posted by Visa and MasterCard. These posted rates are the cost price for the merchant service providers and then are marked up and resold to the public.

Signing up for a Merchant Account
Before signing up for your merchant account, you should carefully review the merchant account agreement and it's terms of use. Many companies uses theses tiny fine prints to hide miscellaneous fees and rates on top of the fees outlined in the main merchant account agreement. In general, ask the sales agent if there are any other fees other than those on the main contract and see what they say. That's not to say that you can blindly sign, but you are just testing the integrity of the sales agent. Many times, what you pay is controlled by the sales agent and the higher the mark up, the fatter their cheque.

Transaction Fee : This is a fixed charge for each transaction processed through your merchant account, usually between 20 and 30 cents for online merchants and 10 to 15 cents for retail POS terminals with face to face transactions. Our rates are clearly posted within the website. Our rates are clearly posted within the website.

Discount Rate : This is the percentage you pay on each transaction you process with your merchant account. For internet and manual online processing the discount rate is usually 2.25% to 2.50% for Canadian merchants. For retail face to face transactions, you can expect to be charged only 1.70% to 1.85%. The higher rates charged for internet and online processing are due to the merchant not having a physical credit card present, so the risk of fraud is greater. As well, goods or services are delivered at a later date after the credit card transaction creating additional risk factors for the processing companies. Also, if your business type is seen as high risk, or restricted type of business, you can expect to pay significantly more. Our rates are clearly posted within the website.

Qualified Discount Rate : This is the lowest rate. It applies (i) for retail transactions where the merchant has the credit card present, 'swipes' it and 'batches out' daily. The rate will be in the 1.70% to 1.85% range; and (ii) for internet and phone/mail order transactions, where the customer or the merchant "keys" in the card information and there is an AVS match. Here the rate will be in the 2.20% to 2.50% range. Various conditions apply in order to qualify for this low rate and if not met, the Mid Qualified or Non Qualified Rate will be added on to the Qualified Rate. Our rates are clearly posted within the website.

Mid-Qualified Discount Rate : An additional charge on top of the standard Qualified Rate where (i) a retailer manually inputs (keys-in) a transaction (i.e. the card is present but not swiped); or (ii) for internet and phone/mail order transactions, there is no AVS match. In either case, a surcharge of from .75% to 1.25% will be added to the normal Qualified Rate. Merchant Advisors Canada does not have this charge

Non-Qualified Discount Rate : An additional charge added to the standard Qualified Rate where (i) a retailer fails to batch out daily; or (ii) for internet and phone/mail order transactions, transactions are keyed in but are not batched out daily (Note: where the customer keys in the information on a website, most gateways perform the batching automatically). In either case, a surcharge of from 1.50% to 2.00% will be added to the normal Qualified Rate. All transactions using international, corporate, government, or business credit cards will also be subject to this surcharge. Our rates are clearly posted within the website.

Keyed : Where a sale is typed in a computer or a terminal (e.g. where the credit card is not available ('card not present') or because the terminal cannot 'read' the credit card, or where a customer types in the information on a merchant's website), the transaction is said to be "keyed". Our rates are clearly posted within the website.

Batch Processing or Batch Fee : Submitting a group or batch of transactions each day to the processor. A daily fee of 20 to 30 cents is sometimes charged.

Address Verification Service (AVS) Fee : AVS service checks that the customer's stated billing address matches the address provided to his credit card company. A fee of up to 10 cents for each transaction may be charged. Merchant Advisors Canada does not have this charge.

Monthly Minimum : This represents the least amount that will be levied against you for discount rate fees in any month, even when you have no sales processed. The typical monthly minimum is in the $20 to $30 range and sometimes even higher. You will be charged this fee only when the sum of all the discount fees you have paid for the particular month do not reach your minimum monthly specification. This fee is not charge if the monthly minimum has been reached. Our rates are clearly posted within the website.

Monthly Statement Fee or Monthly Account Fee : A charge each month for maintenance of your merchant account, preparing your statement, customer support, etc. You can expect this to be in the $10 to $20 range. Our rates are clearly posted within the website.

Chargeback : Chargebacks result when one of your customers disputes your charge on his monthly credit card statement. The customer's card issuer then starts a chargeback procedure - and your merchant account then has deducted from it the amount in dispute. Then, you will have a short period to dispute the issue, by giving the customer's bank with proof that the customer did in fact make the purchase and that he received what he bargained for. A fee of $25 to $40 is also levied against you. Large numbers of chargebacks may cause the termination a merchant account and get you listed the the TMF (Terminated Match Files) or now know as the Match Files. This is a blacklist and merchants are placed there on this list when they are terminated by the processors or it's bank due to excessive chargebacks. Merchant Advisors Canada charges $25 per chargeback.

Gateway Fee : With internet merchant accounts, the 'gateway' integrates the purchase form or shopping cart on your website to your processing service. A monthly fee of $15 to $30 is charged on top of your monthly statement fee. Our rates are clearly posted within the website.

Re-Programming Fee : When a retailer switches merchant account providers and some alterations to his processing system are needed, a re-programming fee may be charged and can be as high as $300.00. Merchant Advisors Canada charges $100.00 per machine.

Reserve : If a merchant's business is perceived as high risk, a hold-back or reserve may be set up to secure the bank regarding the higher risk. The reserve may be either a lump sum payment made upfront, or a percentage of monthly sales processed (5% to 20%), or both. The reserve may be reduced or eliminated if you operate without a lot of chargebacks for a period of time. This does not apply to all.

Termination Fee : Some merchant accounts call for payment of a termination fee if your account is cancelled. Merchant Advisors Canada debit and credit card processing agreement carries a three year term. Our early cancellation fee is $199.

Application fee : A fee charged for completing an application for a merchant account. Prices ranges from $50.00 to $100 and are charged when the account is approved. Some companies charge this amount regardless if the account is approved or not. Our rates are clearly posted within the website.

Annual Fee : An annual fee of $50 to $100.00 is charged by many providers. Merchant Advisors Canada does not impose an annual fee for regular merchant accounts. Some high risk account may carry a small annual fee.

Software/Hardware Fees : For internet and other online processing, merchants usually have to buy or lease a processing program. For retail merchants, terminal and printing equipment needs to be bought, rented or leased. For Online Payment Gateways and Virtual Terminals carry a monthly fee for licensing and software. Our rates are clearly posted within the website.

CPI Compliance Fee : CPI DSS is Card Payment Industry Data Security Standards and governs how card data security is managed by the merchants. The responsibility of PCI is handed down to the credit card processors by the card association, but ultimately, the merchant is responsible for compliant and paying fines when breached. This fee ranges from $10 to $25 per month or an annual fee of $99 to $125 per year by various processors. Merchant Advisors Canada does not impose this fee to our clients.