Who actually pays for your credit card rewards?
When a card is Swipe, there are 2 types of fees involves.
Assessment Fees + Interchange Fees = Wholesale Fees
Wholesale Fees + Markup Fees = Total Processing Fee
Wholesale Fees + Markup Fees = Total Processing Fee
WHOLESALE FEES
Not negotiable. Don’t. Even. Try. It
MARKUP FEES
These fees are negotiable.
- Fees set by issuing banks and the credit card networks
- Regardless of which processor you use, these fees are NON-NEGOTIABLE! No processing company can lower it down and they have to charge these fees.
- Processing Companies nor agents makes any money from these fees.
- Fees set by your payment processor, plus any other add-on equipment or software providers such as a payment gateway provider
- Are negotiable – We have negotiated the LOWEST RATES for YOU! That is why we are not afraid to show you the full pricing which you won’t see with other payment providers.
Note: Beware of hidden fees padded into wholesale fees such as access fee, other item fee, other volume fee and sales transaction fee.
Wholesale Interchange Rates Are Confusing
We feel you.
What’s worse?
There are tons of them, and they vary by credit card.
SwipeCard247 is trained to compare interchange rates published by the major card brands against what you are being billed so you can finally have 100% transparency.
There are actually about 300 individual interchange fees composing the "single" interchange fee you actually pay.
To help you better understand the fees you’re being charged by card networks, we put together some helpful guides:
Below is just a fraction of the many wholesale fees in merchant service industry.
How much issuing bank, credit card network, processor, acquiring bank,
processing company, agent/broker make from each transaction.
1. Liquor Store owner processing $30.00 scenario.
Merchant will be paying wholesale fee + markup fee to process $30.00 payment.
Wholesale Fees No one knows how much processor will charge your customer’s credit card until it’s charged because fees ranges from 1.5% to 2.9% for swiped cards, and 3.5% for keyed-in transactions. American Express – 1.58 up to 3.30%, Discover 1.53% up to 2.53%, Mastercard – 1.29% up to 2.64%, Visa – 1.29% up to 2.54% plus $0.05 up to $0.10 per swipe fee.
Markup Fees (Fees set by your payment processing company. Depending on how much money they want to make from your account or how uneducated you are regarding fees based on that they will charge you markup fees PLUS hidden fees.
|
Wholesale Fee (No one knows what the fees will be.) |
Wholesale Fee (Assuming the fees are below.) |
Markup Fee (Discount rate and Authorization fee is constant.) |
|---|---|---|
| Visa $30.00 x ?% + ? per swipe | Visa $30.00 x 2.00% + $0.10 per swipe |
$30.00 x 0.03% = $0.009 1 swipe x $0.03 = $0.03 |
| Mastercard $30.00 x ?% + ? per swipe | Mastercard $30.00 x 1.90% + $0.06 per swipe | |
| Amex $30.00 x ?% + ? per swipe | Amex $30.00 x 2.30% + $0.12 per swipe | |
| Discover $30.00 x ?% + ? per swipe | Discover $30.00 x 1.70% + $0.08 per swipe | |
| Total Wholesale Fee: ? | Total Wholesale fee it will keep changing | Total Markup Fee: $0.039 |
Example of Monthly Processing Statement Summary
See how to calculate total markup fees below.
Amount processed 40,460.75 x 0.03% = $12.14
Number of sales 1272 x $0.03 = $38.16
Total Markup Fees = $50.3
Total Wholesale Fee = ?
Note: As seen above, merchant only need to focus on markup fees because no one knows how much wholesale fee you’ll be charge. Please stop asking questions like “I’m paying this much %, how much overall % will I pay?”
Merchants need to understand, no one in the payment industry can give you 100% exact pricing that you will pay every single month because wholesale fee keeps changing plus there are over 300+ wholesale fees you get charge from based on customer’s card and that is the reason your monthly fees statement % keeps changing every month.
Tip: Here’s why processing company ask for how much monthly processing volume you have how many monthly clients you are getting based on that they give you different markup rates so they can make good profit from your merchant account.
Understand this scenario in markup fees
$ amount x discount rate (% markup fee)
Number of sales x Authorization Fee (per swipe markup fee)
If you have higher volume but lower number of sales, Agent will charge you more on Discount Rate but less in Authorization Fee.
If you have lower volume but higher number of sales, Agent will charge you more in Authorization Fee but less in Discount Rate.
2. Convenience Store/Gas Station owner processing $10.00 scenario.
Merchant will be paying wholesale fee + markup fee to process $10.00 payment.
|
Wholesale Fee (No one knows what the fees will be.) |
Wholesale Fee (Assuming the fees are below.) |
Markup Fee (Discount rate and Authorization fee is constant.) |
|---|---|---|
| Visa $10.00 x ?% + ? per swipe | Visa $10.00 x 1.80% + $0.08 per swipe |
$10.00 x 0.03% = $0.003 1 swipe x $0.03 = $0.03 |
| Mastercard $10.00 x ?% + ? per swipe | Mastercard $10.00 x 1.60% + $0.05 per swipe | |
| Amex $10.00 x ?% + ? per swipe | Amex $10.00 x 1.95% + $0.10 per swipe | |
| Discover $10.00 x ?% + ? per swipe | Discover $10.00 x 2.05% + $0.07 per swipe | |
| Total Wholesale Fee: ? | Total Wholesale fee it will keep changing | Total Markup Fee: $0.033 |
Example of Monthly Processing Statement Summary
See how to calculate total markup fees below.
Amount processed = 30,105.25 x 0.03% = $9.03
Number of sales 915 x $0.03 = $27.45
Total Markup Fees = $36.48
Total Wholesale Fee = ?
3. Vape Shop owner processing $60.00 scenario.
Merchant will be paying wholesale fee + markup fee to process $60.00 payment.
|
Wholesale Fee (No one knows what the fees will be.) |
Wholesale Fee (Assuming the fees are below.) |
Markup Fee (Discount rate and Authorization fee is constant.) |
|---|---|---|
| Visa $60.00 x ?% + ? per swipe | Visa $60.00 x 1.95% + $0.07 per swipe |
$60.00 x 0.03% = $0.018 1 swipe x $0.03 = $0.03 |
| Mastercard $60.00 x ?% + ? per swipe | Mastercard $60.00 x 2.30% + $0.10 per swipe | |
| Amex $60.00 x ?% + ? per swipe | Amex $60.00 x 1.45% + $0.08 per swipe | |
| Discover $60.00 x ?% + ? per swipe | Discover $60.00 x 2.25% + $0.10 per swipe | |
| Total Wholesale Fee: ? | Total Wholesale fee it will keep changing | Total Markup Fee: $0.048 |
Example of Monthly Processing Statement Summary
See how to calculate total markup fees below.
Amount processed = 15,327.33 x 0.03% = $4.6
Number of sales 397 x $0.03 = $11.91
Total Markup Fees = $16.51
Total Wholesale Fee = ?
4. Motel owner processing $250.00 scenario.
Merchant will be paying wholesale fee + markup fee to process $250.00 payment.
|
Wholesale Fee (No one knows what the fees will be.) |
Wholesale Fee (Assuming the fees are below.) |
Markup Fee (Discount rate and Authorization fee is constant.) |
|---|---|---|
| Visa $250.00 x ?% + ? per swipe | Visa $250.00 x 2.35% + $0.06 per swipe |
$250.00 x 0.03% = $0.075 1 swipe x $0.03 = $0.03 |
| Mastercard $250.00 x ?% + ? per swipe | Mastercard $250.00 x 2.10% + $0.06 per swipe | |
| Amex $250.00 x ?% + ? per swipe | Amex $250.00 x 1.60% + $0.10 per swipe | |
| Discover $250.00 x ?% + ? per swipe | Discover $250.00 x 2.45% + $0.07 per swipe | |
| Total Wholesale Fee: ? | Total Wholesale fee it will keep changing | Total Markup Fee: $0.011 |
Example of Monthly Processing Statement Summary
See how to calculate total markup fees below.
Amount processed 5,465 x 0.03% = $1.6
Number of sales 77 x $0.03 = $2.31
Total Markup Fees = $3.91
Total Wholesale Fee = ?
Note: Please avoid asking stupid questions like “How much will be my percentage rate?”. As you can see above’s examples, that wholesale fees are changing, this means you will never have an exactly the same overall percentage rate every month because of wholesale fees.
Instead of asking how much overall percentage, ask about how much is the Markup Discount Rate, Markup Per Transaction Fee and other junk fees they will be charging.
Common hidden fees you will find in your application agreement. These are the fees padded into wholesale fees and mark up fees.
Understand how free POS Gimmick works
Hardware is Free, but you will always pay Software and Support Fee Processing company cannot afford to give you free POS without charging monthly service fee and if they are then you are going to pay higher fees in processing side since nothing is free.
WHAT MAKES SWIPECARD247 SO DIFFERENT?
Figuring out what POS system is best for your business is a real pain. We make it simple, quick, and affordable so you can be confident you’re making a great decision when choosing your new POS System.
WE DON’T JUST CARE ABOUT POS SYSTEMS WE CARE ABOUT YOU
Monthly Service Fee
(Made up fees/pure profit for processing companies)
Do not pay more than $25 per month fee.
Monthly Customer Service Fee
Monthly Statement Fee
Per Batch Close Fee
PCI Compliance Fee
PCI Non-Compliance Fee
Monthly Breach Insurance Fee
Monthly Data and Breach Protection Fee
Wireless Access Fee
- Chargeback Fee
- Retrieval Fee
- Pre-Arbitration Fee
- AVS
- Voice Authorization
Monthly Minimum Fee Scam
Never sign a contract that has a monthly minimum fee.
Every year banks increase interchange fees and at the same time your processing company might increase their mark up fees. So, you as a merchant need to work with the processing company who will not increase mark up fees. Processing Company can increase markup fees anytime does not matter what pricing contract you did so, it's better to audit your statement monthly to spot any hidden or increased rates
