What is a Discount Fee?
The discount fee (also known as the merchant discount rate) is the percentage-based fee that merchants pay on every credit or debit card transaction. This fee is charged by the payment processor and is typically deducted directly from each transaction.
What is a Per Item Fee?
The per item fee is a fixed fee charged for each individual transaction. This fee is applied whenever a card authorization is created, regardless of the transaction amount.
What are Passthrough/Interchange Costs and Fees?
Passthrough fees include various costs set by card networks and issuing banks, such as:
• Interchange fees – These are paid to the cardholder’s issuing bank whenever a card is used for a purchase.
• Assessment fees – Charged by card networks (like Visa, Mastercard, etc.) to facilitate the transaction.
• Other network fees – These may include charges for processing, security, or compliance services.
These fees are called “passthrough” because they are passed directly from the card brands and banks to you without markup from the processor.
