• Lack of Oversight and Government 
    ​Regulation Gives Credit Card Processors 
    ​Free Rein to ​Overbill Merchants. 

0% Mark-Up / Membership Fees

Credit Card Processors/ISO's (independent sales organizations that resell processing) pretending to be a membership club with no markup. 

All ISO's mark up credit card processing fees. It is called the Discount Rate. If they didn't, they would be doing business for free, and we know that's not the case. Especially an ISO. 

The Discount Rate can be charged in 3 different ways, or even a combination of.

Percentage of Transaction- this is straight up, no games, no bundling, no averaging, etc. Remember, when you use averages and flat fees, etc. the processor sets the numbers in their favor, not the merchants. This method does not require guessing or trying to play the odds. It is based on your actual numbers; e.g. a $100 sale with a .05 Discount Rate cost 5 cents, with no gameplay. 

Transaction Fee - if your average sale goes up and down, then so does the overall fee being paid; e.g. an 8 cent transaction fee on a $100 sale is equal to .08 basis points, and on a $50 sale, it is equal to .16 basis points. They may call this flat rate processing, but just the opposite is true, the percentage cost goes up and down with every sale. 

Flat Fee/Subscription/Membership - This is by far the worst! It is like when you see items on a sale table and everything on it cost $20.00. You know nothing on that table is worth $21.00 let alone $50.00. Everything on that table costs between $1.00 - $20.00 and they make it easy by saying you can pay $20.00 for any of it, regardless of its true worth. Hopefully, you know that is not a good deal, regardless of the sign. 

In merchant processing, they use the same bait and tell merchants "we make this simple, just pay one simple fee over cost". Cost being interchange + dues and assessments. Sounds simple enough, but just the opposite is true - it is way harder and way more complicated.

Remember, if you are paying a percentage, e.g. .05%,  it's .05% regardless of how much you process, as well as the transaction size.

When the ISO/Processor uses a flat rate, they also charge a small transaction fee. 

The tables to the right show that you need to first try to forecast how much your annual processing volume will be. Then depending on the size of the transaction, your discount rate will vary from as low as .11% and as high .36% and everywhere in between. To be fair, the sites we have checked don't post their fees for merchants processing over $500,000 a year. They are just starting at $500 per month. 

However, it is safe to say, this is far from easy, and far from being transparent. Follow the table or just .05%. 


This industry is complicated, but with so many sellers (processors) and resellers (ISOs), they are all looking for a new way to spin it and a way to say we are different. In the end, merchant processing is a commodity like electricity. There's only one difference - cost. 

Processors and ISOs may be better at marketing themselves, saying how great they are, but all you are buying is a data line to send your transaction to the processing networks (visa, MasterCard, Discover, and Amex). A data line is much like an electric line. Whether you are flipping a light switch or keying a credit card; in the end, you are sending a data file, nothing more! So now, we get back to who will send that file for the lowest fee.

Well, to be fair, ethics is also important. So you might ask yourself if someone is playing games and being deceptive in their marketing "Zero Markup", Flat Rates", "Wholesale" Cost", etc. Are they are someone that you should trust with your business checking account? 

Always make sure you check the BBB Report - one of the largest ISO's playing this game has an A- and isn't even Accredited. While A- may not seem that bad, most credit processors even with hundreds of complaints still get an A+.

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