CreditCard Service Fee

Why is the credit card processing fee so high?
Can we negotiate a lower rate?
What if I use my own Merchant Account? 

Personalized Shared Merchant Account
If you are using the Shared Personalized Merchant Account offered by Suggestion Tree, the rates are 4% for US Dollar transactions. Euro's are a 5% rate (both are subject to change without notice if we incur additional fees from our processors).

This may seems high in light of the fact that many merchant accounts advertise a rate of 1.9% to 2.35% or something similar.  But there are hidden fees that are not advertised.  For example, there is a monthly gateway fee and a monthly merchant fee.  There is an annual merchant fee and an annual PCI compliance insurance fee.  These are not optional fees.  But by far the most significant influencer of the rate is the fact that the advertised rates of around 2% are for the mid-qualified charges.  These are typically cards that are either swiped, charged in person, verified in some form and are bank issued cards with no rewards program attached.  Those that don't meet the qualifications for mid-qualfied are considered non-qualified and they process at a much higher rate.  In the past four years the number of non-qualified cards have skyrocketed!  Many more people are taking advantage of the rewards program. 

All of these fees combined mean that an advertised rate of 2% can quickly swell to over 4% -- especially in a month where you have lower volume.  In a recent year our actual fees exceeded our mid-qualified rate (the rate our merchant advertises) by nearly 2%. We're providing this as a convenience service and this 4% fee is set and is not negotiable.

Service Fees
The service fee for the use of the EventCORE merchant account is 4% of the total charges and refunds. The basis is not the total amount that shows on the Fund Listing Page which is the net amount. The basis of the 4% charge is the total of all of your credits plus the total of all of your refunds. For example, if you have $10,000 in charges, but $500 in refunds your net amount of funds collected is $9500. But the basis for your credit card 4% fee is $10,500. We have to do it this way because that's how the bank charges us. They charge based on the transaction not on the balance.  

Minimum Service Fee
There also is a minimum service fee of $250. We need to charge this because we incur set-up fees regardless of the amount you pass through this account. Remember, we are creating an account just for you under our bank. One way to look at the $250 minimum is to realize that once your charges and refunds exceed $6250, you've met the minium. But even if your event is only going to bring in $2500, you may still want to consider this option. The extra $150 may be worth not having to go through all of the effort and minimum charges your bank may charge (i.e. setting up a merchant account on your own often has a setup fee of $50 to $200, plus a $10 monthly charge.)

Idle Months
The SMA will be opened in the month when you begin anticpating that you'll receive revenue. Any month in which you don't incur at least $1000 in charges is subject to an additional $20 fee.  This normally will only be an issue if you open the card to early before you are ready to begin taking payments. The account is closed at the time when final revenue payment is made.

Using Your Own Merchant Account Fees
When you use your own merchant account there is no credit card processing fee.  Instructions for setting this up are provided here.