Introduction
Many business owners think they understand their processing fees, but payment processors often add hidden charges that quietly eat into your profits. These fees may not be obvious unless you know what to look for. In this article, we’ll uncover the most common hidden fees that could be increasing your costs.
1. Monthly & Annual Fees
Many processors charge monthly service fees or an annual membership fee without clear justification.
- Example: A processor might charge a $19.95 monthly fee for “account maintenance.”
- Some charge an annual PCI compliance fee of $75-$100.
2. Non-Qualified Surcharge Fees
If you’re on tiered pricing, your transactions may be downgraded to a higher fee category.
- Example: Instead of a 1.5% “Qualified” rate, you’re pushed into a 3.5% “Non-Qualified” rate.
- Processors rarely explain why transactions are downgraded, making it hard to contest.
3. Statement & Batch Fees
Some processors charge extra fees just for generating your monthly statement or closing transactions.
- Statement fees: Some providers charge a $5-$10 monthly fee just to send you a statement.
- Batch fees: You may be charged $0.10-$0.25 per day when closing out transactions.
4. Early Termination Fees
Some processors lock you into contracts and charge penalties if you leave early.
- Example: You switch processors and get hit with a $495 termination fee.
- Always check the contract fine print before signing.