Credit Card Merchant Fees (Transaction Fees, AVS Fees, Authorization Fees, and more)

As the payment industry evolves, so do the credit card merchant fees that come along with it. From three interchange rates to now thousands of interchange rates, credit card merchant fees have become more complex.

As time goes on, credit card merchant processors, banks, and payment facilitators have become more deceptive in how they conceal markup costs. Knowledge is power in the case of credit card merchant fees especially when it concerns credit card transaction fees and authorization fees.

Here is the complete guide to understanding credit card processing to review all credit card merchant fees.

You’ll learn more about examples of transaction fees and deceptive credit card merchant fee tactics to be aware of when it comes per transaction fees and authorization fees for credit card processing.

What is a Credit Card Transaction Fee?

A per transaction fee can be associated with every time a credit card is accepted by a business, whether it be a face to face transaction, online, or over the phone (also referred to as a MOTO transaction). Per transaction fees can have multiple names and meanings, which is why it is so easy for credit card processing companies and banks to get away with charging these costs to businesses.

There are lots of fees involved in the credit card processing industry. That’s because so many players are involved with each transaction. You need to account for the credit card processor, merchant account providers, credit card companies, and more.

For example, other transaction fees a business can incur are authorization fees, return fees, address verification service (AVS fees), batch fees, gateway authorization fees, monthly minimum fee, and voice authorization fees.

These few examples of transaction fees above can all vary in cost based on their functionality and what the credit card processing company or bank thinks they can get away with to charge you as the merchant.

A per transaction fee can also have multiple layers and different rates associated with each transaction that takes place. When it comes to credit card merchant fees, the per transaction fee is a credit card merchant fee that can be significantly overlooked.

Additional Reading: Average Credit Card Processing Fees

Different Types of Credit Card Processing Fees

Below is a list of the different credit card transaction fees that can be identified on a merchant service statement.

Keep in mind, the majority of the credit card merchant fees are negotiable and a business should never take these credit card merchant fees at face value.

Authorization Fee

Auth fees are charged every time a credit card is swiped or manually keyed in by a business for goods or services. This is the most widely recognized per transaction fee that is displayed on a merchant statement, and it’s negotiable.

• Auth Fee
• Disc P/I (Per Item)
• Authorization Fee
• Authorization Fee – Amex
• AVS Auth
• POS Auth
• Gateway Auth
• GTWY Auth
• Voice Auth
• Voice Authorization Fee
• Capture Auth Fee
• Network Auth Fee
• Amex OptBlue Auth Fee
• Access Fee
• CPU Fee
• ECI CPU Fee

Per Item / Per Transaction Fee

These fees are charged every time a card is swiped, dipped, taped, or manually keyed in by a business for goods and services. This is the second most widely recognized credit card transaction fee showcased on a statement. But it’s also negotiable.

Other names for this fee include:

• Item Fee
• Base Per Item Fee
• Per Transaction Fee
• Per Item Fee
• Trans Fee
• Transaction Fee
• Sales Transaction Fee
• Other Per Item Fee
• Adjustment Fee
• Fee
• ND Fee

Communication Fees

Communication fees are typically charged to merchants who have physical equipment to process their credit card transactions.

This is another negotiable credit card processing fee allows the equipment to communicate directly with the processor and is often charged additionally to the per transaction or authorization fee.

• WAT Fee
• WATS Fee
• POS WAT Fee
• Global WAT Fee

Address Verification Fee (AVS)

Also known as an address verification system, a credit card merchant fee only charged for online or MOTO (mail order telephone order) transactions.

This negotiable credit card processing fee can also be charged if a business processes a customer’s credit card via manually entering the credit card information.

These transaction fees are charged additionally to your per item or per transaction fees.

• AVS Fee
• AVS WATs Fee
• AVS Auth
• Electronic AVS Fee
• Voice AVS Fee
• AVS CPU Fee

Return Item / Refund Fee

A credit card merchant fee charged to the merchant for a refund processed via a credit card merchant terminal or a refund given for phone or online orders.

Note: This is not a chargeback fee. This is simply a return or refund for products or services sold. You are also charged the percentage rate you receive for merchant services for every refund you give to your customers.

• Refund Fee
• Return Fee
• Refund/Item Fee
• Return Auth
• Return Transaction Fee

Most businesses don’t realize this, but return fees can actually be negotiated with their processors.

Other Credit Card Processing Fees

the below credit card transaction fees listed are other fees you can review and negotiate that are typically added to your merchant account.

• Gateway Fee
• Gateway TeleCheck Auth Fee
• Gateway TeleCheck Deposit Fee
• Gateway TeleCheck Adjustment Fee
• Wireless Fee
• Batch Fee
• Batch Header Fee
• ARU Fee
• Website Usage Per Item
• IVR Usage Per Item
• Monthly Fee
• Interchange Fee
• Flat Fee
• Processing Costs
• Card Not Present Fees
• Credit or Debit Card Fees (different for each)
• Fixed Acquirer Network Fee
• Early Termination Fee
• Payment Gateway Fee
• Statement Fee
• PCI Non Compliance Fee
• Chargeback Fee
• Annual Fee

Final Thoughts

Reviewing credit card merchant fees can be a tedious task, especially if it’s your first time going through this process. You need to understand that these fees are comprised of charges from multiple entities, including credit card networks, credit card processors, banks, and other players in this industry.

That’s why the payment industry is so lucrative and difficult to navigate. So always read the fine print in your contract.

If you are having trouble identifying the credit card merchant fees your organization is being charged, get a free audit and see the service markups your merchant account is being hit with. Our team can help you identify those fees and even eliminate them from your statements. This can ultimately help you save tens of thousands of dollars on credit card processing fees every year.