Merchant Service Charges, known as (MSC) are the charges taken on every credit and debit card transaction that the business accepts. The majority of businesses compare merchant accounts this way, however the cheapest rate, does not necessarily mean it is the best deal for your organisation.
Merchant Service providers will usually quote a percentage fee, but you should be aware, that this may not be the same for each type of card.
For example, you may be quoted a different MSC percentage fee, depending on whether it is a debit or a credit card or whether it is a Visa or Mastercard (or another card scheme such as American Express). Equally, business and commercial cards and international cards will be charged separately.
Different rates may then apply depending on which channel you are processing the payments in. There could be a difference between face to face sales (cardholder present) and sales taken over the phone or via a website (cardholder not present).
Because, Cardholder not present (CNP) transactions carry the associated risk of fraud, acquirers will tend to charge you a higher rate to process the transaction. This is often referred to as a 'non-secure' transaction rate. Another consideration, is that by asking the cardholder to read their details out to you, triggers your PCI DSS requirements to protect them and increases your risk of reputational damage. If you cannot evidence to your acquirer that you are PCI DSS compliant, you may be charged additional fees each month.
Some providers will offer the business, blended rates. With Blended pricing, the merchant will always pay the same rate on a transaction of a specific card name regardless of how the transaction was accepted. Whilst this might sound attractive, it can often lead the businesses overpaying on certain card types.
It is therefore vital that you understand where and how your customers will be paying you, so you can source the best deal for you. This can often by very complicated, which merchant service statements, littered with acronyms and jargon.
Other potential fees that might occur could be:
Gala Technology appreciate that there is a lot to take in!
So whilst one provider might look like the cheapest option, we work with a number of leading providers for all the payment solutions you may need, across all channels Is it very important that a business understands the charges associated with a merchant account.
Gala Technology can provide some free and independent advice, cutting through the industry jargon and help you set up the right merchant account for you, with the right partner(s)