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TAKING A CLOSER LOOK AT THE FEES ASSOCIATED WITH OFFSHORE MERCHANT ACCOUNTS

If you are the owner of a business entity then have a merchant account set up for your business is very important as it not only allows you to accept credit card payments from your customers but also helps you to systematically arrange your transactions. However, since you know that there are no free cups of tea in this world, it is the same with merchant accounts. There are several kinds of fees that you have to pay if you open a merchant account. Therefore, you have to do a lot of research as to which services are required by for your business and which are not. Also there are a whole lot of service providers out there in the market and hence you should choose the best one.

The fees that are applicable for merchant accounts are:

  • Authorization Fees

Each time your customer uses his/her credit card to purchase a product from your shop; you have to send his credit card details to the bank which gave him the card. Only after the bank authorizes the card you will be able to go ahead with the transaction. The bank or your service provider will charge you for this process and it is termed as the Authorization fees. The disadvantage of this fee is that, even if the card is declined the fee is charged. This is not similar to the, per item fee or the transaction fee that is charged for merchant services.

  • Statement Fee

Your merchant account provider will charge you a fee every month to provide the statement for that month which is termed as the statement fee. This fee comes as a cumulative sum with your monthly statement that has all the transactions for the month and also the fees that are applicable to your account. This fee is not similar to the minimum monthly fee.

A few merchant services need their customers to pay for it. There is a minimum amount that the merchant has to cover every month for such services. If the merchant is unable to get the minimum amount then he will have to pay it from his business profits or forfeit the service. For example, suppose the minimum monthly fees is hundred dollars and the merchant was able to make only seventy five dollars from his customers, then the additional twenty five dollars will have to be paid by the merchant.

  • Chargeback Fee

When your customer wants a refund due to a dispute, the merchant is compelled to return the amount. This is called as “Credit Card Chargeback”. Having several charge back’s pose a high risk to merchant services as they are responsible for the money. MasterCard and Visa have a condition that permits only one percent charge backs every month. Suppose the percentage is higher, then the merchant account provider will have to pay the fines ranging from five thousand dollars to twenty five thousand dollars, which are promptly passed on to the merchants.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.