MerchantPro Express Blog

What Is Your Cost Per Transaction?

Posted by on Oct 4, 2016 12:35:55 PM

What is Your Cost Per Transaction?

When you're trying to figure out your credit-card processing fees, the cost per transaction may be a helpful figure for you to calculate. Determining your cost per transaction can be an easy and useful way of getting your head around your credit card processing expense. Given all the expenses you have to worry about as a business owner, having a top-of-mind way to think about some of the more confusing ones can help ensure you r credit card processing is cost-effective.

To calculate the cost per transaction for your merchant account, simply take the total amount of fees paid and divide by the number of transactions.

Here’s an example:

Let’s say the fees you paid in August added up to a total of $150 and the number of transactions that involved a customer debit or credit card during this month was 200. In this case, you’re spending $0.75 with every transaction.

$150 / 200 = 0.75

Remember, the more you’re charged, the more your provider makes, and while they’re entitled to earn a profit like you do, they could very well be taking advantage of you.

Credit-card processing costs are not the same everywhere.

Even after you've calculated your cost per transaction, you may not know if you’re getting a good deal because credit-card processing fees vary depending on which merchant service provider you’re using. We recommend you contact several other providers and see what they have to offer. You can even ask other providers what your average cost per transaction would be if you went with them, which would help you determine where your provider lies on the scale between fair and ridiculously expensive. Remember, the more you’re charged, the more your provider makes, and while they’re entitled to earn a profit as well as you, they could very well be taking advantage of you.

If you are unhappy with what you uncover, take the time to contact other providers so you can assess their available merchant accounts. You may be able to lower your credit card processing fees and put more money into your business where it belongs.  

Topics: MPX Benefits

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