Credit Card Processing Fees: A Comparative Analysis of Top Providers

Strategic Insights -

Credit card processing fees can be a significant burden for merchants, with rates and charges varying widely among providers. Merchant Resources, a leading credit card processing company, compared its services with those of top providers, including Costco, Square Reader, Bank of America, and Wells Fargo. The analysis reveals significant differences in pricing, equipment costs, and contract terms among these providers.

Key Takeaways:

  • Costco's base retail Visa/MC rate is 1.38% and 19 cents, but requires merchants to be executive members and pay $110 per year. Additionally, the proprietary terminal costs $489 to purchase or $30 per month for 2 years.
  • Square Reader's base retail Visa/MC rate is 2.75% and has no monthly fees, making it a suitable option for seasonal merchants.
  • Wells Fargo's base retail Visa/MC rate is 2.2% and 25 cents, with a lease of $35 for 48 months or purchase terminal for $699. The salesperson did not disclose the non-qualified rate, and there is a $75 yearly fee and $95 setup fee.
  • Bank of America's base retail Visa/MC rate is 1.69%, with no contract requirements. However, the terminal cost on a lease is $28.95 per month or $599 to purchase.
  • Merchant Resources offers a 1.25% debit/credit card processing rate with no pin, a 1.65% base Visa and MasterCard rate, and no monthly fees. The company also provides a free terminal and cellular phone swiper or POS for restaurants.

Statistics:

  • Average credit card processing fees among top providers: 2.5% to 3.5%
  • Terminal costs: $489 (Costco), $699 (Wells Fargo), $599 (Bank of America), and free (Merchant Resources)
  • Monthly fees: $10 (Intuit Quickbooks), $30 (Costco), $35 (Wells Fargo), and $0 (Merchant Resources)
  • Setup fees: $95 (Wells Fargo), $0 (Merchant Resources)
  • Yearly fees: $110 (Costco), $75 (Wells Fargo), $0 (Bank of America)

Sources:

  • M2 PressWIRE, "Costco, Square Reader, Bank of America, Wells Fargo: Credit Card Processing, Free, Card Reader, 0% Debit"
  • Merchant Resources, http://www.credit-card-processing.com
  • Intuit Quickbooks, https://www.intuit.com/quickbooks/
  • Costco Merchant Services, [no website provided in the source]
  • Square Reader, https://squareup.com/
  • Wells Fargo Merchant Services, https://www.wellsfargo.com/com/merchant-services/
  • Bank of America Merchant Services, https://www.bankofamerica.com/merchant-services/