reduce credit card merchant account fees with cost plus pricing

Now that we’ve been designing web sites for a lot of ecommerce stores in Los Angeles and other cities, the subject of credit card processing fees has started to enter our client conversations. After doing a bit of research, I’ve discovered that the merchant processing fees are not as complicated as one would think. it all comes down essentially to Interchange fees and everything else that gets deducted when a card is processed.

Interchange fees which are set by the credit card associations of Visa and MasterCard, account for the majority of the “fees” you pay to accept credit cards. So when you charge a customer $100 and you end up with $97.15, about 70% to 90% of the amount deducted from the $100 relates to these “fixed interchange fees”. Nevertheless, Interchange fees have a complex pricing structure, which is based on the type of credit or debit card, the products sold, size of the accepting merchant, and whether a transaction is ecommerce, bricks and mortar, or mail order/phone order or done online.

How does all this understanding of the Interchange fees help me? The answer is pretty easy. Find a merchant account provider that charges “cost plus”, where cost is the “known” interchange fee. then all additional fees are set in stone and easily verifiable by you. no more hidden fees. no more excessive charges. At my ecommrce shopping cart software company (, we use a company called Eonline at and first thing next week i will be checking on their pricing policies. the good part is that their rates are low enough that i don’t think they are tacking on excessive additional fees and none of my web store customers are complaining so the 2.4% rate must be pretty competitive.