Could these hidden card machine costs be hurting your business?

Last Updated on: 22nd November 2023, 04:27 am

How much your card machine costs you is one of the main things you’ll think about when deciding which merchant service provider to go with, or which card machine to use.

But price can be a complicated thing with card machines, especially if you choose the wrong provider.

That’s because some of the fees you’ll face won’t actually become clear until after you’ve already signed up and started accepting card payments.

And these “hidden” costs can quickly mount up and leave you facing a much bigger bill than you imagined.

In this guide we want to make you aware of the fees you need to be on the lookout for and ask your merchant services provider about before signing on the dotted line.

Joining fees

The first fee you should be aware of are joining fees.

These are typically charged by some merchant service providers simply for choosing them to provide your card machine and the necessary set up accounts.

You’ll often find these fees are completely unnecessary. So be sure you check whether you’ll face them before signing up.

Minimum monthly service charge

A minimum service charge is the least amount you could pay for using a card machine, regardless of the value or number of transactions you process.

You’ll usually find the minimum charge between £10-£30 a month, and you’ll pay this amount even if your monthly card transaction value is lower.

Minimum monthly fees have become less of an issue recently as more customers choose to pay on card, but it’s still something to be aware of and you should look for a provider that doesn’t look to charge a minimum monthly fee.

Authorisation fee

Whenever a card payment is made, the acquiring bank and card scheme will run a check to make sure the customer has the money in their account to pay, and that the card hasn’t been reported stolen.

And some merchant service providers will add a fee to every transaction to cover the costs of the checks – and the fee will be charged regardless of whether the transaction is successful or not.

These fees are usually a fixed amount – rather than a percentage of each transaction – and it’s typically businesses that charge lower transaction values that feel these fees the most.

Fees for reporting online

When you use a card machine – either Chip and PIN or contactless – you’re able to view detailed reports on your business’ payment activity, transaction values and volumes.

But some merchant service providers will try to add a fee to your account for accessing these online reporting features.

PCI DSS compliance fees

Payment Card Industry Data Security Standards (PCI DSS) are a mandatory security requirement that any business using a card machine must meet.

Some merchant service providers can add a charge for PCI DSS compliance (either monthly or annually) and these charges can be huge.

And they could be added to your account regardless of whether your service provider actually helps you stay compliant.

PCI DSS non-compliance fees

As well as charging you for being PCI DSS compliant (even if they don’t help you with the compliance) some merchant service providers will also charge you a fee if you fail to be compliant with the regulations.

These charges could add anything up to £50 a month onto your merchant bill.

Some even calculate your non-compliance fees as a percentage of your monthly turnover, which could be thousands of pounds lost.

Do your research before signing up for merchant services

While some fees are inevitable when signing up for a merchant account or card machine, they’re not always necessary.

And when these fees can end up costing you thousands of pounds of your hard earned money every month, you need to make sure you aren’t paying them when you don’t need to.

Before signing up to a service provider, make sure you understand all the fees your account will be subject to and ensure you do your research and shop around for a deal that will benefit your business, not cost it.

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