Your processing salesman told you about rates and transactions fees. But what are all those other fees called assessments, acquirer fees, wats fees, FANF fees, Nabu Fees, etcetera, and etcetera and etcetera?
The interchange rates and transaction fees are what the issuing bank receives for issuing your customer credit. On top of that are assessments which go to the brands, Visa, MasterCard, Discover and American Express.
The brands have over time added other fees. Here is a list: acquirer fees, kilobyte fees, nabu fees (Network Access and Brand Usage), license fees, cross border fees, network fees, validation fees, account status fees, integrity fees, data usage fees, international fees, account status fees, verification fees, misuse fees, zero floor fees, credit voucher, file transmission and merchant location fees. These can be rates fees, transaction fees and monthly fees. All of these are passed through from the brands to the merchant.
Mark ups from the processor include rates and transaction fees higher than the interchange rates and transaction fees along with monthly fees, wats fees, maintenance fees, gateway fees and monthly fees. These are the only fees that are negotiable!
As a side note, don’t be fooled by flat rates because they have to be large enough to cover all the interchange, assessments, other brand fees and the processors markup fees. Yes the processor has to make money for servicing your account. The question is whether the simplified flat fee is better or worse than the cost plus fee which lists every confusing fee in detail. Hopefully having some understanding of this complicated and confusing fee structure helps.