Merchant account fee

For ecommerce merchant account which setup in third party gateway, the fee of processing varies according to different payment processors. Generally there are: processing rate which is certain proportion of transaction amount, fixed transaction fee for each order, refund fee, chargeback fee, monthly or annual fee, and rolling reserve. Some processor charge only a few kinds of fee, some may charge more.  The fee is normally calculated based on the merchant industry, volume, chargeback rate, transaction quality history, product etc. Big merchant with stable volume in low risk obviously are with less processing fee level. For high risk merchant, the processing rate is relatively higher. The rolling reserve is not a fee charged by third party payment. It is a kind of deposit hold for 180 days as of the transaction date to prevent potential chargebaks which may arise later within the above period. As in credit card payment, the card holder has the right to file chargeback with their issuing bank within up to 180 days or longer. The credit card association consider the card holder right in prior and generally approve the dispute. After 180 days, the certain rate of rolling reserve in normally a week transaction will be released back to the merchant account.

Fixed transaction fee is a 1$ fee for each transaction. The fee is a service for processing each transaction between banks system and by the third party. Most of processors does not charge declined fee but not each. Monthly fee and annual fee are waived by many processors. Some payment processors does not charge many categories of fee but only want to welcome honest and good merchant for long term cooperation relationship. 


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