How Much Do Merchant Services Cost?

by | May 20, 2019

How much do merchant services cost? Well, the answer depends on which provider you use.

Could you save over 90% on your merchant service charges? Read on to find out…

How much are you paying for your merchant services?

When last did you take a closer look at your merchant services bill?

Sure, there will always be transaction charges (providers need to make their money, of course). But how much are you being charged per transaction? And, more worryingly, what other charges are you incurring?

In the merchant payment world, there are three basic merchant services charges you can expect:

  1. The cost of the terminal, which is variable but competitive
  2. Cost of interchange, which is fixed by EEC law to 0.3 (with the exception of Amex)
  3. The commission charged on transactions, which is the amount paid to the introducer

So, what are all those other charges labelled as ‘miscellaneous’? You may not even be aware that you’re being charged:

  • An electronic authorisation fee charged per transaction
  • Payment Card Industry (PCI) compliance charges
  • Terminal rental
  • Business dashboard to draw up invoices and statements

Let’s do the maths on how much merchant services cost

If you were to use the provider we compared with (at 100 transactions per day) your monthly charges would include:

  • Electronic authorisation fee – £139.50 per month
  • PCI compliance charges – £12 per month
  • Terminal rental – £23.95 month
  • Business dashboard to draw up invoices and statements £4.99 per month

These charges add up to £180.44 per month = £2165.28 per year

Now, let’s compare these charges to our Smarter Business Merchant Services offering:

  • Electronic authorisation fee – £0 per month
  • PCI compliance charges – £0 per month
  • Terminal rental – £12 per month
  • Business dashboard to draw up invoices and statements -£0 per month

These charges add up to £12 per month = £144 per year

This is a saving of 90%! 

So, aside from massive savings, what makes Smarter Business’ merchant services different?

  • No premium card charges
  • Next-day payment at no extra charge
  • No authorisation fees No minimum monthly fee
  • No signup or setup fees
  • Digital signup – no hard copies required
  • No PCI compliance fees
  • Free customer portal to draw up invoices and statements
  • Already in contract? We’ll outweigh cost whilst still saving you money
  • 24/7 Support Desk and phone support
  • Faulty terminal? We’ll replace it the next day!
  • Create additional revenue with Direct Currency Conversion

How our retail merchant services work

  1. Send us your latest card processing statement
  2. We’ll submit this to our supplier to obtain a price comparison for you
  3. We’ll then present you with the price offered along with the necessary paperwork should you decide to proceed
  4. We’ll take your completed paperwork and communicate with the supplier
  5. You’ll then receive an email from our supplier requiring an e-signature to finalise your contract
  6. The terminal is then posted to you with set-up and operational instructions
  7. We follow up with a courtesy call to ensure you are trading smoothly

Interchange Plus Pricing for Merchant Services

Curious about how interchange plus pricing for merchant services works? What about interchange plus rates and your interchange plus pricing model?

In the infographic below, we’ll unpack interchange plus rates to help you get a better understanding of what you’re actually paying for.

What is interchange plus?

Interchange plus (or Interchange ++) is the fixed fee that is given to the card issuer for every transaction processed.

How are interchange plus rates regulated?

While the EU has sought to standardise interchange plus pricing for merchant services, there are still many variable rates and fees that apply based on the criteria around the individual transaction. These rates are regulated by each individual state within the EU and also for cross-border transactions or Intra European transactions by the card schemes centrally. As such, these rates still change and are updated periodically.

For the most up to date current rates please visit the website of your relative card scheme, where these rates will be published.

Card scheme fees

These are the charges levied by the card schemes on the acquiring member. So for each acquirer who holds membership or a licence to process cards from the schemes, there are charges levied for every transaction processed. There are additional and multiple fees that relate to the types of transactions processed. In general, the basis for these fees and the rates charged are based on the volume of processing that the member or licence holder has with the individual card scheme.

Processing value and clearing volume

  • These are applied to every transaction – processed at a % for value and a per item cost for volume.
  • So every transaction has a base cost of both a % and a per-item cost.

Acquiring charges

These are the charges agreed to with your acquiring bank and usually come in the form of an ad valorum % rate. They represent the cost of the service provided, relative to the authorisation capture and subsequent funding of transactions processed on behalf of the merchant.

Cost plus pricing card

Cost plus pricing is the transparent pass-through of each of the cost elements as outlined above, while the elements in relation to the interchange and card scheme fees may vary depending on a number of factors the acquiring charge (charge amount) element will remain fixed as per your agreement.

A smarter merchant services solution

Taking these charges into account, how much are you actually paying for your merchant services? We bet that with our transparent pricing (no hidden fees!), you’ll be able to save on your merchant services. In fact, when we compared our costs to those of another merchant services provider and found that we could save the merchant 90% on their merchant services fees.

Read more here. 

Interchange Plus Pricing for Merchant Services

Download our Merchant Services Guide

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