What is Transaction Fee | chargebackhit.com

Transaction Fee

Transaction fees are charges imposed on businesses by their payment service provider each time the provider processes an electronic payment for either a Card Present or Card Not Present transaction.

These fees can vary slightly depending on the payment service provider but typically range from 0.5% to 5% of the transaction’s value. Additionally, fixed fees may be attached to transactions. As a result, smaller merchants often set a minimum purchase value (e.g., £5) for card or electronic payments to avoid absorbing fees for smaller transactions due to their slim margins.

A transaction fee is composed of two parts: an acquirer fee and a processor’s fee. Besides transaction fees, there might be other fees that merchants could incur while processing transactions.

Gaining insights into various transaction fees promotes transparency in your operational expenses. Your payment service provider typically sends a monthly merchant account statement, outlining the fees you incurred.

Providers employ diverse fee structures and charges, and you are likely to encounter the following common types:

  • Interchange fees
  • Terminal fees
  • Tiered fees
  • Subscription fees
  • International transaction fees

Written by Andrii Vovk

Rate article