We have been researching some of the tactics used by the merchant service companies, and the more we learn the more we're convinced this business gives used car salesmen a good name. Most doctors pay little attention to how much they're paying for credit card processing - probably figuring that their bank is giving them a good rate. However, if they read their statements, they'll discover that possibly thousands of dollars per month are being quietly withdrawn from their practice's checking account.
How The Typical Processing Arrangement Works: There are two parts to the credit card rate, interchange and the merchant account markup. Interchange is the amount that gets paid to Visa and MasterCard. The processor markup goes to your processor to cover their costs and profit. There are hundreds of different interchange fees, and they are based on factors like the type of card being used, the type of merchant involved and how secure the transaction is considered to be. The credit card companies charge the processors these fees, and they are entirely passed along to the merchant.