Understanding Merchant Account Rates: The Basics

Any business that sells products and accepts credit or debit cards deals with merchant account rates on a daily basis.

The overarching term is applied to the various fees and charges associated with accepting and processing card payments.

The rates you pay may vary based on a number of factors, such as whether your business is strictly online or if you also operate a brick and mortar store, which credit cards you accept, and what point of sale (POS) system you are using.

You may be wondering why you even have to pay these fees.

Accepting multiple forms of payment makes life easier for you and your customers; it just comes at a price.

The companies issuing the cards and the financial institutions all want to take a small cut.

The number of companies associated with your rates and fees (who have hands in the purse) depends on the merchant agreement you signed prior to doing business.


Here’s what you should know about your merchant account rates.

Generally, there is a rate of about 1% to 3% per transaction for payment processing.

This is called the discount rate, and it varies depending on the credit card company.

Many business owners don’t factor these costs into the overhead for their company, which may eat away at their bottom line.

There are many different types of rates and fees that can appear on your merchant account statement, including:

  • Account setup fee
  • Brand usage fee
  • Authorization fee
  • Daily batch fee
  • Merchant location fee
  • PIN Debit transaction fee
  • Address verification service fee

We provide a handy breakdown here that explains many of the fees you might see on your statement.


How do you get the best possible merchant account rate?

While you may have agreed to specific rates and fees when you first signed up with your payment processor, that doesn’t mean those charges will stay the same.

Over time, other incidental charges may appear that can easily go unnoticed if you don’t take the time to read through your monthly merchant account statement.

The result? You could be paying too much in fees.

Before choosing a payment processor, take the time to research and read reviews about the company.

Find out as much as you can about their fees and transactional costs before deciding on a particular payment processing plan.

And don’t be afraid to negotiate! Negotiating can help you secure the best possible merchant account rates, especially when you know what you’re talking about.


If you don’t have the time to do the research, MyWatchmen can help.

We understand how time-consuming running a business can be, so why not let MyWatchmen handle the fine print for you? Our experts will take a deep dive into your merchant account statement to see if you could be overpaying and to make sure you are getting the best rates possible.

MyWatchmen negotiates on your behalf to guarantee your rates are locked in place for three years; if those rates change within that timespan, we cover the cost.

Additionally, we don’t make anything until you are saving money.


It’s really that simple—unless we can save you money, we don’t take a single payment or fee.

MyWatchmen is available to businesses all over the world and we keep our calls short so that you can carry on with your busy schedule.

Send us a message online to learn more, call +1(888)256-2845, or email us today.

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