Merchant Account Fees & Costs
Depending on the product you are going to use, there may be an associated startup expense,
such as a cost for a credit card machine, Internet Gateway (like Authorize.net), etc.
The following fees are standard among all merchant providers. Click a Fee for a Detailed Explanation.
Q:
Qualified Discount Rate, Mid-Qualified Rate & Non-Qualified Rate
Visa & MasterCard charges merchant providers several dozen rates that range significantly
in price. To simplify the billing, merchant providers group all these rates into three pricing
categories:
- Qualified Discount Rate
- Mid-Qualified Rate
- Non-Qualified Rate
- Qualified Discount Rate
The discount rate you see advertised is referred to as your qualified rate and is a percentage
taken from every dollar charged.
Our Qualified Discount Rate is: 2.22% per transaction
- Mid-Qualified Rate
This is the flat rate added to the discount rate for a transaction that meets some, but not all of the
specific requirements to qualify for the merchant’s best set of interchange categories.
For a internet merchant, mid-qualified transactions are downgraded to mid-qualified because:
1. The transaction was hand-keyed, but AVS was used.
2. The batch was not closed daily, but within 48 hours.
3. More than one authorization was attempted.
Merchants will pay a higher rate for these mid-qualified (or partially qualified) transactions.
Our Mid-Qualified Discount Rate is: 1.35% per transaction
- Non-Qualified Rate
This rate is added to your qualified rate and applies on certain card types, such as business or
corporate as well as some consumer cards. Other situations will also cause your transactions to
automatically downgrade to this rate, such as you didn’t use Address Verification Service (AVS)
on any keyed in transactions or failed to batch out within 24 hours of processing that particular sale.
Our Non-Qualified Discount Rate is: 1.75% per transaction
Q:
Transaction Fee
A transaction fee is a set amount you are charged for each transaction (sale) you process.
Since there is no standard terminology in the industry, some companies may call this fee an
"Authorization", "Per Item", "Interchange Fee", etc.
Our Transaction Fee is: $0.30 per transaction
Q:
Address Verification Service (AVS)
Address Verification Service (AVS) is a fraud prevention service which validates the cardholder's
billing address provided in the order against the card issuing bank's records.
You must use this service on all keyed-in transactions or
they will automatically downgrade to your non-qualified rate.
Our AVS Transaction Fee is: $0.05 per transaction
Q:
Batch Fee
Your transactions must be closed out within 24 hours of processing the sales (once a day)
or they will automatically downgrade to the non-qualified rate. This fee covers the expenses involved with
your terminal or account accessing our toll-free processing network to close out the transactions. Batching
out once a day is sufficient for most merchants. If you do not process anything for a particular day, then
it will not apply.
Our Batch Fee is: $0.25
Q:
Monthly Statement/ Customer Service Fee
Most providers call their monthly service fee a "statement or customer service" fee.
This helps cover the expenses involved for providing 24/7 customer service, risk management & loss prevention,
underwriting, billing, fraudulent services, etc.
Our Monthly Statement Fee is: $9.95
Q:
Monthly Minimum Fee
This applies when the amount you are paying in discount fees does not add up to your monthly minimum. For example,
your discount rate is 2.5% and you processed $500 for the month, that is $12.50 in discount fees (0.025 X $500).
If your monthly minimum is $25, then you will be charged the $12.50 difference. If you were to process $1,000 a month,
then that would be $25.00 in discount fees, resulting in no extra charges.
Our Monthly Minimum is: $25.00
Q:
Monthly Gateway Fee
This applies to Internet/Mail/Phone Order merchants using an Internet gateway service such as Authorize.net.
Gateway providers charge this fee to cover the expenses involved for providing you their secure gateway service.
This includes collecting the customer’s credit card information and securely processing it over the web.
It generally comes with a monthly service charge along with a per transaction fee.
We provide each merchant account with included Authorize.Net Gateway account.
The monthly fee charged by Authorize.Net is $19.95 per month.
Q:
Contractual Terms & Termination Fee
We prefer our accounts to come with a three year agreement and an early cancellation fee of $250. You may be thinking,
"what if I'm not satisfied with your service?" We completely understand your concern and rest assure our company's
reputation stands for quality service. The main reason we prefer this type of agreement is for the significant cost we
incur to board any single merchant. As an example, for merchants using Authorize.net, we are charged a setup fee by them.
The process of setting up a merchant account is similar to getting a business loan. Your application travels through multiple
channels and requires significant company resources. For example, the application must be entered into our system, go through
the underwriting and approval process, setup by someone from installation, clear the billing department and end its journey at
the filing station. This whole process requires the use of several dozen employees working behind the scenes to make it all happen.
This doesn't even include your 24/7 customer service department, supplies, etc. In short, the $250 helps us recover all the expenses
we incur for any given account that cancels within a short period of time. However, if your cancellation is a result of our error or lack
of quality service, please contact your personal account manager for consideration of fee removal.
Q:
Discover Account Activation Fee
If you apply for an account directly through them, they will charge you a $50 setup fee. If you apply through Drundo.Net, it will only be
$25 and you can still call them to negotiate your rate.
Our Discover Account Activation Fee is: $25.00
Q:
Chargeback & Retrieval Fee
A chargeback fee usually applies when a transaction has been disputed by the customer or their issuing bank. A retrieval fee applies when
the issuing bank is requesting the original sales draft, such as a signed receipt, order invoice, etc.
Our Chargeback fee is $25.00 and Retrieval fee is $10.00
Q:
Voice Authorization Fee (for retail merchants only
Associated when an issuing bank sends a "Please Call” message to the merchant instead of an authorization number and the merchant must make a phone call.
This very seldom occurs.
