Payment Processor, in simple words, is a middleman between the customer and merchant who is appointed by the merchant to handle the transactions from different channels for the Merchant Acquiring Banks. Payment processors have turned out to be crucial in today’s age to guarantee payment, avoid fraud and make the payment process much more convenient. The payment processor makes a contract with the merchant, so that it receives certain percentage of the transaction it processes.
In the 21st century we have seen the rise of various payment processors. Some payment processor with a good reputation includes PayPal, Due, Stripe etc. If you’re looking for a good CBD processor, be sure to check out thesoutherninstitute.com/cbd-merchant-services/. Payment processors avoid inconvenience and make the payment processing stress-free for the merchants. Specially, online and electronic payment processors have become more relevant and popular among the people. Electronic payments are much more vulnerable to fraud than any other means of payment, so the merchants require the best and safest means of processor and need to avoid fraud in all ways imaginable. Thus, payment processor are a necessity, so the origin of the question, “HOW MUCH SHOULD A PAYMENT PROCESSOR BE PAID?”
Because of more competition between the different processors, the prices for processing seems to be declining day by day as companies are providing better processing and security for less money, which is benefiting the merchant, the most. There are better offers available in the market everyday. The most common percent of charge these days for one transaction is about 2-3 (talking overall, the type payment may differ it, which we will discuss in the paragraph to come) of the transaction amount. But, of course there are more deals available now due to more competition and the more transactions you make as a merchant through a single processor, the more possibility you have of getting a hefty discount from them in their fees. If you make a large number of your transactions through a single processor, then even if they don’t provide a discount automatically, you can demand one and negotiate with your processor, because it will cost them more to find a new client who makes large transactions through them just like you, than it takes them to give you a discount. So, the lesser the number of transactions the more you have to pay. In the beginning, you are just making smaller transactions and just starting out, so you need them more than they need you. But later when you start performing a number of large transactions, the coin flips; they need you more than you need them. So, the fees differ according to the volume of transactions made by the merchant. The value of the merchant also matters, as a more valuable company is the want of all processors, they might cut a sweet deal for valuable merchants.
Another aspect that differs the fees is that the type of method of payment by the customer. For example, the rate required to process payment made through Visa Rewards Card is higher than a standard Visa or Debit Card. American Express’ interchange rates are higher than those for Visa and MasterCard. And, processing through a terminal costs more than processing through software or electronically.
The amount of fees you pay to your processor depends upon the value of company, the number of transactions and the type of payment made by the customer. So, the amount to be paid is quite uncertain. But, the best deal is when you have more value, perform numerous transaction from same processor and decline third party services that your processor offers those which costs a lot of money and aren’t that necessary.