In today’s world of growing technology, consumers are habituated to shopping for things with just a few clicks on their smartphones. With e-commerce on the rise, every business tries to provide their customers with a good interface and functionalities to stay and rise in the industry.
However, it is important to know that to enhance your customers’ overall purchasing experience, you need to provide them with a smooth checkout process as well. This is where the payment gateway comes into the picture.
Digital payment became easier with the introduction of a payment gateway. They enable you with various services like they help you accept online payments on your website, provide instant funds, manage transactions, and more. For all these services, a merchant is charged payment gateway fees. There are numerous factors on which this fee depends. Let’s look are those factors.
Factors Responsible for Payment Gateway Fees
- Interchange Rate
Interchange rate is defined as the amount that credit card companies such as Mastercard, American Express, and VISA charge from the bank account of the merchant for every payment received through a debit or credit card. This is the transaction handling cost incurred by the issuing bank.
Moreover, the interchange rate also fluctuates with the type of card, the degree of risk associated with the business, and the mode of accepting payments, i.e., swipe or online.
- Merchant Account Fee
In order to accept credit card payments, a retailer needs to interlink the credit card network to the merchant account. This account lets the merchant receive payments via credit cards, and the merchant account provider deposits the sum into their bank account at frequent intervals.
There merchant account providers charge a minimal fee in addition to the interchange fee. This fee depends on the business type and gross volume of transactions. Moreover, there might be a monthly maintenance fee and disputed transaction fee as well.
- Payment Security
Accepting payment online is significantly riskier if compared to offline transactions. Payment gateways fees also depend upon the degree of security they provide during online transactions.
Components of Payment Gateway Fees
Setup Charges
Certain payment gateway providers charge a one-time setup fee wherein it covers the cost of getting the merchant onboard. These costs include document verification, infrastructure costs, KYC, etc.
- Maintenance Charge
Charges like operations, software maintenance, infrastructure maintenance, upgrades, customer support, and more come under maintenance charge. Moreover, a merchant might choose different payment modes, transaction settlement cycles, etc. A payment gateway provider might charge you for all these services.
- Integration Charges
The integration fee is a payment gateway fee that is charged by the service providers to integrate their payment gateway to a merchant’s website. The charges depend on which platforms (website, app, etc.) the merchant wants the payment gateway to be integrated into.
- Merchant Discount Rate
The merchant discount rate or transaction discount rate is the cost charged by the payment gateway providers for every transaction made. This includes the bank charges (for card payment services), processing charges (digital payment providers), and tax. The percentage of charge is usually predetermined and is based on the customer’s payment mode.
Grow Your Business with Razorpay at Low Costs
Wondering which payment gateway is best for your online business website in terms of payment gateway fees? Then Razorpay is the solution for your confusion. With zero maintenance, setup, and integration charges, Razorpay provides the best services for the smooth functioning of your business.
With an industry-leading success rate, in-depth reporting and insights, easy integration process, and superior checkout experience, Razorpay would help empower your business with all the right tools and unmatched experience in the industry.
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