How do card terminal transaction costs work?

When purchasing or renting card terminals it is important to remember that the prices of chip and pin machines may not only add up to the cost of the initial purchase or rental but there may also be some sort of transaction cost involved with the suppliers of the card terminals. This is why it is so important to compare credit card terminals in the UK as different vendors have different costs and different payment plans, you must find the best one to suit your business so that you do not end up paying costs that you are not anticipating. Of course the card payment machines cost is going to be the most expensive part of the deal, the equipment does not come that cheap and you do not want to spend all of your card terminals budget on the equipment and then not have enough set aside to pay other costs such as transaction costs.

How does transaction costs factor in card payment machines cost?

On top of paying for the equipment itself the other major factor that you will have to factor in are the transaction costs. The transaction fee is basically the percentage of money that each provider is likely to charge your company for each customer transaction made on the card terminals, this is an important factor to include when totting up card payment machines cost. The major card associations such as American Express, Visa and Mastercard will often determine the exact amount of the fees that you are likely to incur with each transaction whilst the processors will then determine your total costs based on the risk that they are taking with your business.  All of these factors can drastically change the prices of chip and pin machines and they must be taken into account when considering card payment machines costs.

The processors will consider your company’s credit history as well as the type of transactions that you are processing and the amount of the charge. Most credit card processors will have two rates: one for transactions where the card is not present such as those that are conducted over the internet and one where the card is present, where the transaction is completed straight away, face to face.

The process can get a little tricky after that as some suppliers like to charge fees on top of the transaction fee. There may sometimes be a non-refundable application fee which could be in excess of £150, whilst other vendors might charge you an activation fee or a set up fee.

This is where you need to be at your most vigilant, ensure that you get any fees and charges in writing and be very wary of agreements that may require a host of extortionate fees up front.

Is it better do get card terminals from more reputable suppliers?

Whilst signing up with a more well known merchant may cause you to have to agree to paying higher transaction fees it is more than worth it as you will be doing business with a company that you know you can trust.


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