A fee schedule related to payments and merchant acquiring is a comprehensive breakdown of the costs involved in payment processing, including transaction fees, handling fees, and service charges. For businesses, especially in the travel sector, having a clear and precise fee schedule is crucial for ensuring customers understand the payment processing costs, while also enabling the business to effectively control its expenses.
Fee schedules can typically consist of a mix of the following elements,
This fee is imposed by card networks (Visa, Mastercard, American Express, and Discover) to support the upkeep of electronic payment systems. Assessment fees usually range from 0.12% to 0.15% and are usually subject to review and adjustment around April and October.
Authorisation fees are associated with verifying cardholder details and approving transactions, usually adding a small charge to each transaction, generally between 1p and 6p.
The interchange fee represents the most significant portion of payment processing expenses and is directed to the bank that issued the customer’s card. Issuing banks take on a degree of risk when they provide credit cards, and the interchange fee serves to mitigate this risk.
In the United States, there are more than 300 variations of interchange rates, particularly for Visa and Mastercard, with significant differences observed internationally. Each rate is influenced by various factors, including the type of card (credit, debit, corporate), card classification (reward, premium, or standard debit), the industry involved, and the transaction amount. Interchange rates generally fall between 0.05% + $0.10 and 3.10% + $0.22. Payment processors are responsible for collecting and remitting these fees on behalf of merchants.
The Merchant Service Charge (MSC) is incurred for every transaction and is dependent on the card type utilised. Typical rates can be:
- Debit cards: 0.25% to 0.6%
- Credit cards: 0.3% to 0.9%
- Commercial credit cards: 1.5% to 2.5%
The processor fee is the amount merchants pay their payment processor for transaction handling. Merchants typically rely on a processor as a liaison to connect with card networks, as direct connections can be quite complicated. Processor fees are often the only segment of payment costs that can be negotiated and can vary significantly based on multiple factors. Elements such as the merchant’s industry, sales approach, average transaction value, refund rate, and chargeback rate all play a role in shaping the processor’s fee structure.
For online transactions, businesses require a payment gateway to securely capture and transmit card information. Providers of payment gateways may charge a monthly fee, usually ranging from £10 to £20, or impose a small fee per transaction, typically between 6p and 10p.
Per-transaction fees cover the various expenses linked to processing each transaction. These fees are often calculated as a percentage of the sale amount and may include the previously mentioned charges, encompassing the overall cost of electronically processing each payment.
Terminal fees are applicable for face-to-face card transactions. Merchants have the option to rent or buy a terminal, with choices including countertop, portable, or mobile terminals. Mobile solutions, such as Zettle or Square, can be purchased outright for approximately £20.
In the travel sector, where clients engage in significant transactions and frequently book across borders, an organised fee structure is essential for businesses to convey the exact costs associated with payment processing. This encompasses fees for managing international transactions, currency exchanges, and any extra charges that might arise from various payment options. For travel agencies, having transparent payment fee schedules boosts clarity and builds customer trust by detailing possible charges throughout the entire payment journey.
One of the main difficulties in overseeing fee schedules for payment processing is the need to keep them current, as fees can fluctuate based on exchange rates, terms from acquiring banks, or changes in payment scheme fees. To ensure accuracy and uniformity across various payment processors and acquirers, regular assessments and effective communication with clients are essential. Travel companies must create fee schedules that are both thorough and straightforward, especially for international transactions where cross-border and conversion fees could be involved, to prevent confusion and possible disputes regarding charges.
Felloh empowers travel companies by providing immediate insights into payment processing fees from various acquirers. The platform streamlines the calculation of transaction fees, cross-border charges, and other related costs, offering businesses a comprehensive and up-to-date overview of their payment expenses. With Felloh’s solutions, travel companies can uphold a precise and transparent fee structure, ensuring that customers are aware of all costs from the outset, which fosters trust and satisfaction. By facilitating efficient fee management, Felloh enables travel businesses to remain competitive, transparent, and agile in response to fluctuations in payment processing costs.
Our booking reconciliation feature ensures that all payments received—whether through card payments, bank transfers, or other methods—are automatically linked to their associated booking, eliminating the need for manual receipting.
