Merchant Fees, Rates, and Pricing Models
Which merchant fees are pass-through costs?
Understanding which merchant fees are pass-through costs is essential for businesses looking to manage their payment processing expenses effectively. Pass-through costs refer to fees that the payment processor charges exactly as they are assessed by card networks or banks, without any markup. These fees are typically passed directly to the merchant.
Common Pass-Through Merchant Fees
Pass-through fees generally include interchange fees and assessment fees. Interchange fees are paid to the card-issuing banks and vary depending on the card type and transaction. Assessment fees are charged by the card networks like Visa or Mastercard. These fees are non-negotiable and set by the networks themselves.
Examples of Pass-Through Fees
- Interchange fees charged by card-issuing banks
- Card network assessment fees (Visa, Mastercard, Discover, American Express)
- PCI compliance fees passed from networks
- Payment gateway fees that directly reflect network charges
While pass-through fees are consistent, processors may add their own markup or service fees on top. It's important to distinguish these to understand your true processing costs.
How to Identify Pass-Through Fees on Your Statement
Merchant processing statements can be complex, but identifying pass-through fees is easier when you know what to look for. These fees are usually itemized separately and labeled as interchange or assessment fees. Using a tool like Merchant Statement Scanner can help analyze your PDF statements to automatically highlight pass-through costs and any additional markups.
To take practical next steps, consider scanning your latest merchant processing statement with Merchant Statement Scanner. This will give you clear insights into your pass-through fees and help you negotiate better rates or switch to a more transparent processor.
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