The percentage is calculated on your types of sales, evaluated risk and average amounts and is paid to the credit card processor. Depending on your plan, your service provider might throw in your credit card processor terminal for free, otherwise there is an additional cost of about $200 to buy one.

Generally it is the merchant that must cover all credit card processing fees, but there is a case in which the merchant has the right to charge the customer to cover the fee. When a customer returns an item that was bought by credit card, the fees for that transaction are not refunded to the merchant and in fact there may be additional return fees applied to the refund transaction.

In that case, it is wise to make it a store policy that there is a fee charged for every refund which is a percentage of the original price. That way the merchant is covered, and if it is made clear in the return policy, customers will be aware in advance.

When choosing a merchant processor, you want to compare all the different rates as well as percentage charged per transaction to find the one that has the overall lowest prices. Some of the best options are Flagship Merchant Services, Merchant Accounts Express, Merchant Warehouse, goEmerchant Merchant Accounts and Advanced Merchant Services.

However, you need to also look into the service you are getting for your money and determine the type of merchant account you need to find the best solution for you.

Credit card processing rates do vary, and there are often hidden fees that you need to be completely aware of before selecting a company. If you do the research and compare prices, you will ensure that you have the best processing solution for your needs.