Payment gateway fees

Sebastien | 01st March 2013 | Posted in Knowledge base, Payment gateway
Payment gateway fees

The payment gateway fees have been an area that is perhaps not well understood. It is difficult enough to choose a payment gateway but it becomes even harder when the choice is to be confirmed based on the payment gateway fees. It is good to learn about the payment gateway fees and what these fees are for.

To begin with, the payment gateway and the merchant accounts are two different things altogether and will attract different charges. The payment gateway will be the link between the online merchant account and the online business and has the role of processing the credit cards and debit cards as well as facilitating the checks on payment. The confusion in charges applicable for these two arises from the fact that some merchant account providers lump up the payment gateway and the merchant accounts.

Components of the payment gateway fees structure

The payment gateway fees can be broken down into three main categories: the transaction based fees, the one-off fees and the recurring fees.

One-off fees

The set up fee is the first encounter with payment gateway charges. Some of the payment gateways will be provided for free and the fee is staggered in the billing statements while for others, the fee has to be paid up front.

Transaction fees

As the name suggests, the transaction fee is paid for every single transaction on the payment gateway. The fee is always a flat rate and it is hurting for the online merchants doing the small transactions. Payment gateway providers may offer a limited number of free transactions and later levy a fee for every transaction thereafter.

Monthly charges

This is a monthly service fee which is charged by the payment gateway provider for managing your account. Monthly fees usually include a number of free transactions.

Recurring billing

The recurring billing is charged for similarly named transactions aimed at building customer loyalty. This charge is done as a fixed service subscription. Having good knowledge about the payment gateway fees structure, it becomes very easy to do comparison between the different options available. The decision made then unveils the best payment gateway with a competent and reasonable pricing structure. When the payment gateway has been bundled together with the merchant account, the pricing structure differs. The difference in pricing structure may come as a welcome option that provides better pricing or on the contrary, the bundled billing may create greater confusion. In here in the bundled billing and also evident in the payment gateway fees are the hidden charges.

The hidden charges

Devious payment gateway providers have often short changed their customers especially when they provide information on their fee structures sparingly. It is only when reality hits home that an online merchant comes to learn of the rip off often with devastating repercussions to the business. Some of the hidden charges in the payment gateway fees structure are:

Chargeback fees are charged by some gateway providers while others do not. This fee is applied when an online shopper disputes any charge on their credit card.

Setup fees are charged upfront or hidden in the billing for the first month. Always be keen to ask whether setup fees are charged on the account.

Technical support fees also called helpdesk fees are charged for every time a call is made for assistance in case a problem is encountered with the payment gateway.

Annual fees are charged by some payment gateway companies on their clients which might not be what you expected.

Remember that you should always read through the contract before settling for the payment gateway from a specific payment gateway company. This is the only way you can pick out any inconsistencies with the information provided. Be sure of what you and your online business are getting into.

Comparison of payment gateway fees and pricing

The comparison between the pricing structures for different payment gateway is not an easy task. Finding the fee structure as used and applied by a payment gateway provider is a hectic task because they haven’t listed the fees on their websites. An individual has to request for a quote in order to get these figures. This is no easy task.

When doing the comparison between the different payment gateway pricing structures, an individual should employ either of two methods. The first one is the totaling up of all fees and going for the option that is most reasonable. On the other side, each item on the pricing structure can be compared across the identified payment gateways to find a cheap but exact option for an online business.

Your search for the best payment gateway should culminate in finding the ultimate balance between affordability, functionality and reliability. Payment gateway fees are just one consideration to keep in mind even though it proves to be the most difficult. Pay us a visit at limpidmarket.com for the more information, comparison of payment gateways and useful tips about payment gateways and payment solutions.

Published on 1 March 2013 by Sebastien for LimpidMarket