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How Merchant Services Providers Make Money

When you see the fees that your merchant services providers charge you in your monthyl merchant statement you may think that they are making a small fortune off of you.  The truth is they aren’t.  The companies that are really making a small fortune off of your company are Visa, MasterCard, American Express & Discover.

What the credit card companies do is charge merchant services providers like Choice Merchant Services interchange rates.  The interchange rates vary based on the transaction type.  Yet, in the typical merchant services provider fees that you pay in transaction fees, about 90% of that cost goes directly to the coffers of Visa, Mastercard, American Express & Discover, the remaining 10% of the fee goes to your merchant services processing provider.

So when you negotiate your rate, you will almost always get the best deal by asking for interchange + a few basis points pricing.  This allows your merchant services provider to make a few dollars per month off of your account every month, and gives you the lowest possible credit card processing fees.  If you are working with a volume merchant services provider like Choice Merchant Services – you have a recipe for success.

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