Credit card processing is the second largest business expense for retail businesses. The problem many business owners run into is that they have no idea what they have bought – they don’t know what costs are baked in or whether they’re overpaying for the system they have.

How are costs for merchant services calculated?


The physical terminals that are used to process payments cost money. Whether you pay to purchase the hardware, or the cost is wrapped into other fees you pay, will depend on the merchant services provider.

Transaction Fees

Every time you swipe your card, two major parties get paid

  • The card companies (Visa/ Mastercard/Discover/American Express)
  • The credit card processors

How much they get paid is determined by the card type (Visa), sub type (cash back), value of transaction, and how it is processed (swiped vs. keyed in). With so many different sub types of cards, there are more than 400 different fee percentages you can be charged if you’re on an interchange model. This fee is a cost to your business. Depending on your merchant service provider (processor), you’ll be charged a different percentage.

Other Fees

There are many other possible fees you could be charged in addition to these two main types depending on your merchant services provider.

  • Interchange downgrades
  • Point of sale software fees
  • Authorization fees
  • Gateway fees
  • Statement fees
  • Chargeback fees
  • Return fees
  • PCI Compliance fees
  • Batch fees
  • Early termination fees
  • International card fees
  • Business card fees
  • Non-qualified fees

What other factors go into choosing a merchant services provider?

After you’ve compared the cost factors, you then must consider the other variables that affect your merchant services provider relationship.

Technology Integration

Will your technology have easy reporting into sales reporting or accounting applications? This varies between providers and processing solutions.


Every minute your credit card processing is down, you’re losing money. If you have an issue, you need to know it will be resolved quickly. Can you get a physical person to come to your shop to fix the issue, a replacement terminal in a timely manner, or is your only service access a 24/7 call line?


Most merchant services contracts are between 3-5 years, whether it’s important to you to keep your options open is something to consider.

Processing Time

How quickly will the funds from a transaction hit your account? This varies slightly between different providers.

How should you choose?

Every business owner will have different priorities in what they want and need from a merchant services provider.  Some may want a robust software program, while others place high significance on support availability or the lowest cost possible.  What is important to you might be a feature or service that means your transaction costs are a bit higher with free hardware, or a lower cost transaction/interchange with a software fee.  Choosing your provider should be a thoughtful decision you make, partnering with a processor that fits your needs and budget.

We have re-imagined merchant services. Business owners have put up with complex fees and indifferent service for too long. WECU Merchant Services fixes these problems for good. Best of all? It’s easy to get started. Learn more about WECU Merchant Services.