Q) How much do vendors pay to credit card companies per transaction? Does it vary with size of the transaction?
A) When a business signs up for a merchant account, all the terms including the cost per transaction (per item fee plus the rates associated with that card) are set by the processing company. The cost from Visa and MC (known as Interchange Fees) is passed along to the merchant as well as the mark up added by the processing company.
There are little restrictions on how much a processor can charge a merchant in fees. Yes, depending on the volume of the transaction, the amount paid by a merchant for any one transaction can can range from a few cents to over 5%.
It’s best to find some free advice on the particulars of each business – so that you can be sure to get the right program with a fair and ethical pricing structure. In the very least as a general rule, Interchange Plus programs offer a clear break down of pass through costs and mark up.
