Credit card processing & batch fees
Posted by: Curtis Stevens on November 21st, 2009

I recently read an article by someone named Evan and I would like to evaluate a few things they said.  The whole article was about the batch fee credit card processors charge.  As he explained, a batch is simply a collection of credit card transactions that are submitted for settlement at the end of the end of the day.  It is true, that most providers charge a batch fee.  Honestly, this is a revenue source for providers, but they also have a cost as well.  When you submit the batch, you are accessing the network to submit the data.   It really doesn’t matter where a provider makes it’s profit, as long as the bottom line is profitable and reasonable. He talked about Elavon having some great rates with no batch fees.  I advise the merchant to simply look at the whole picture before making that decision about any particular company.  He did mention that the credit card processing rate merchants pay include taxes, which is simply not true. He also mentioned merchants pay 3 to 5%, which I think is a very high average. Interchange tops out at around 3%, so if merchant is paying 4 or 5%, then they obviously didn’t shop around much or haven’t done so in a very long time.

He also mentioned a few hundred dollars for an “online terminal”, which he is probably referring to an Internet gateway service. I believe this isn’t very reasonable as well. As I said, look at the whole picture before determining if a company is competitive. Lastly, he mentioned they fund him the same day, which simply isn’t true. No processor does same day funding. It technically takes about 48 business hours to move from the card issuer through the federal reserve to the merchant provider’s account. If you have 24 hour funding, you are essentially receiving the money before they do.

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