Transaction Fee

The fee charged to a merchant as payment for a transaction.

For example:
If a merchant has a transaction fee of $0.25 on their account, they will be charged $0.25 each time they use their credit card machine or equipment to charge a customer, issue a return, run a batch, or conduct any other function that requires that the credit card machine to contact the processing bank.

Many merchant service providers charge an additional fee to perform many everyday functions such as issuing a return, or running a batch. Any additional fees charged for services such as this would be in addition to the transaction fee.

For example:
If a merchant service provider has a batch fee of $0.25, and a transaction fee of $0.30, the total charge to run a batch would be $0.55.

Transaction fees usually remain consistent regardless of the qualification status of the discount rate. Qualified, mid-qualified, and non-qualified transactions will typically be charged the same transaction fee.

It is often possible for both new merchants and existing merchants to have a transaction fee lowered. Whether hunting for a new merchant account, or trying to lower fees on an existing account, most credit card processors and independent sales organizations (ISO) are able to lower the transaction fee.