Payment Processing

Payment Processing for Debt Collection Merchant Accounts

Are you a debt collection agency worried that traditional merchant accounts won’t accept your high-risk business?

Debt collection companies often face difficulty finding a suitable payment processor due to the high risk associated with their businesses.

Fortunately, payment processing solutions tailored to businesses in the debt collection industry exist. These processors offer high-risk businesses lower rates and more flexible payment plans than traditional merchant accounts.

This article will discuss how debt-collection businesses can safely and securely process payments while protecting their bottom line.

What Is a Collection Agency Merchant Account?

A collection agency merchant account is a specialized form of payment processing for debt collection businesses. It allows these companies to accept customer payments and securely process them into their accounts.

Merchant accounts are essential for any business taking credit cards or e-check payments. However, many traditional banks refuse these services due to the reputational risk associated with collection agency businesses.

Credit card companies are also unwilling to deal with and take on further credit card debt from customers of debt buyers and collectors.

For this reason, it is important to seek out collection agency merchant services with a company that specializes in providing high-risk merchant accounts. These providers have experience dealing with the specific risks associated with debt collection and can offer collection agencies more flexible solutions than traditional banks.

Some of these solutions may even come complete with chargeback protection and fraud prevention tools specifically designed for this industry. This can help ensure customer security while providing peace of mind for collection agencies dealing with a significant amount of the debt.

Types of Merchant Accounts for Debt Collection

Various types of merchant accounts are available for debt collection companies. They include debit cards, credit cards, ACH, and e-Check merchant accounts.

Debit Card Merchant Accounts

A debit card merchant account can make it much easier for your agency to accept such payments on a one-time or recurring basis.

But there’s also a catch—unfortunately, the payment data often changes each year when it comes to debit cards.

Over 20% of all debit cards must be reissued due to expired dates, lost or stolen cards, and data breaches. That means you must collect updated payment information from debtors every time their card is reissued.

Updating the payment information is especially important if you’re using recurring billing. Otherwise, the payments will decline unless the data is accurate and up-to-date.

This waste of time and labor can be avoided with ACH/e-check payments—bank accounts rarely change, eliminating the need to update payment data regularly.

ACH & e-Check Merchant Accounts

ACH and e-check payments allow you to electronically debit funds from debtors’ bank accounts. These payment methods offer less risk than card payments—an important consideration when running a business in the debt collection industry.

These payment methods are more reliable for recurring payments as bank accounts don’t often change.

For instance, people often have direct deposits tied to their accounts and use them for household bills. Or they use their banks for direct salary deposits.

When consumers switch banks, there’s no need to update data. Bank accounts tend to remain the same and stable in the long run. They rarely need to change payment information tied to their bank accounts.

This makes ACH and e-Check Merchant Accounts perfect for recurring payments; it increases cash flow stability and avoids revenue leaks.

Credit Card Merchant Accounts

Getting qualified for a credit card merchant account for debt collection agencies is no easy feat. Most acquiring banks classify debt collection agencies as higher risk due to chargebacks. After all, disputing a credit card transaction is the go-to move for many debtors looking to buy time or default on their payments.

Furthermore, credit card companies are often unwilling to let merchant accounts take on more debt from unpaid balances.

That said, getting approved isn’t the biggest hurdle for this type of account—it’s keeping chargebacks down. And when chargebacks rise too much, it can seriously affect your long-term credit card processing ability.

With credit card merchant accounts, it’s crucial to have chargeback management in place.

Why Are Debt Collectors Labeled High-risk?

Here are reasons why debt collectors are considered high-risk:

Nonpayment/Inconsistent cash flow: If a debt collector fails to collect payments on time (if at all), it can result in significant losses for the company and its business operations.

Chargebacks: Debt collectors have no control over customer disputes or fraud-related incidents that may lead to chargebacks. Card companies can also reject payments based on the amount of risk the debt collector represents. This can result in significant financial losses and damage to the reputation of debt collectors.

Reputational risks: Debt collection businesses are vulnerable to reputational risks due to the nature of their work and their collection efforts with customers. A debt collector seen as having aggressive collection actions or engaging in deceptive practices could lead to consumer complaints and public criticism.

Subscription/Recurring billing: Each month, the debt collectors must ensure that their customer base doesn’t decrease or default on payments. If customers don’t renew contracts or are past due on paying, the debt collection company will suffer significant losses.

How to Apply for a Debt Collection Merchant Account

When applying for a Debt Collection Merchant Account, you will need to provide the following documents to ensure quick approval:

Proof of your business bank account: This must be a bank statement, checkbook, or voided check with your name and address printed on it. This is to ensure that the funds from the processing will be settled into the correct bank account.

Compliant website: Your website should adhere to industry standards set by PCI Security Standards Council and comply with any country-specific regulations that apply to your business.

Processing history: Three months of the most recent processing statements showing customer transactions and payments.

Business financial history: Three months of the most current bank statements showing activity within the business account, such as deposits and withdrawals.

Personal financial history: For businesses owned by one person (sole proprietorship), providing three months of personal bank statements can help speed up the process and avoid delays due to additional verification requirements being needed.

Photo ID: A valid photo ID must be presented for every signer on an application so that we can verify their identity to protect against potential fraud or malicious activities related to our services.

Age of business: The age of your business is also essential for determining if you qualify for an account and how long it will take to get approved. Generally speaking, companies that have been operating within one year are more likely to get approved than those which are new or just starting out in their operations.

Von Payments Is Ready To Help With Debt Collection

As a business owner in a high-risk vertical or industry, you must ensure your debt collection practices are secure and compliant.

That’s where Von Payments comes in. We specialize in helping debt collectors process payments quickly and safely.

We offer numerous features that ensure you follow the credit bureaus‘ regulations while securely managing customer data. Our advanced fraud detection system flags suspicious activity instantly, so your customers’ security is always top of mind.

Von Payments provides end-to-end encryption to guarantee payment information remains safe and secure while offering tokenization technology, making storing customer data easier and more cost-effective under one centralized platform.

At Von Payments, we understand how important it is to have a secure payment processing system when dealing with high-risk industries—which is why we are dedicated to providing the highest level of protection for both customers and businesses.

Contact us today to discover how Von Payments can help you get high-risk merchant accounts!


Credit Card Processing

What Are Credit Card Processing Fees?

The modern world of commerce has already shifted to digital payments.

During the 12 months leading up to October 2021, over 25% of US consumers opened a new credit card—a significant rise from 15.7% one year prior and consistent with pre-pandemic figures as revealed by data from The New York Fed.

With this spike in credit card usage, it’s crucial to understand credit card processing fees as it impacts your business’ bottom line.

But ever wondered how these fees are calculated and what they cover?

Especially if you’re a business owner in high-risk verticals, credit card processing fees tend to be higher than those of low-risk businesses.

Credit card payment processing fees are unavoidable in business, but they don’t have to be a burden. Understanding these fees and how they can impact your bottom line can help you maximize profits as a merchant.

In this guide, we’ll help you get to grips with what credit card processing fees mean for your high-risk business. We’ll share valuable insights into how to lower your credit card processing fees using high-risk payment processors.

What Are Payment Processing Fees?

Credit card processing fees are the costs for accepting card payments or other electronic payments. These fees typically comprise two components: an interchange fee and a payment processor fee

Merchants may also incur other types of fees, such as regular subscription fees, statement fees, service fees, chargeback fees, credit card surcharges, equipment rental charges, or setup/activation fees.

These fees can range from 2.87% to 4.35%, and this doesn’t include any merchant service provider fees. It’s important to note that these charges can add up quickly, reducing your profits and potentially impacting your business’s bottom line. 

Those operating in higher-risk verticals or industries are likely to face even higher processing fees that may put a strain on their finances. Therefore, small business owners need to take the time to research potential processing fees and compare prices among different credit card processors.

How Do Credit Card Processing Fees Work?

Credit card processing fees are a necessary evil in running a business. But understanding how credit card processing companies work and additional fees can help you maximize profits.

Here are the different types of credit card processing fees and how they’re calculated.

Interchange Fees 

Set by the card networks like Visa, Mastercard, Discover, and American Express, interchange fees are calculated as a percentage of each transaction plus a flat fee.

Interchange fees cover costs associated with verifying the transaction—such as authorizations and fraud protection—and serve to incentivize banks that issue the cards to keep offering them. 

These fees range from 1.5%-3% of each transaction. 

Payment Processor Fees 

The payment processor fee is compensation for hosting and maintaining the technology used to secure transactions. 

Payment processors charge fees to—well, process payments—and facilitate transactions at a flat rate or based on transaction volume. These fees include monthly, per-transaction, equipment lease, and statement fees

Depending on the payment processor, these costs can range from a few cents to a few percent of each transaction. 

Assessment Fees 

Assessment fees in payment processing are small yet important charges applied to credit card transactions. Typically, these fees amount to a percentage of the total transaction value. The major credit card networks set and charge them.

Factors such as card type (credit card versus debit card), types of transactions, and transaction volume can affect the rate at which these assessment fees are charged.

Additionally, foreign transactions may incur extra costs due to currency conversion or other factors.

Payment Processing Pricing Structures 

You can use several strategies to reduce your rates, such as shopping around different payment networks or negotiating rates with current providers. You can also consider various pricing structures and decide which will work best for your business.

Flat-Rate Pricing

Flat-rate pricing is a payment processing model that allows you to pay a fixed fee for each transaction. This fee includes interchange fees, card brand fees, and the processor charges or own margin fees.

This structure can benefit businesses that want the predictability of their monthly costs, making budgeting easier. But if other variables could lower your interchange rate, you may not benefit from those savings with a flat-rate pricing structure.

Additionally, processors may charge a flat monthly fee in addition to their per-transaction fees, which can increase your overall costs without adding additional processing services or benefits.

Tiered Pricing

Tiered pricing is a popular payment processing structure among merchants in high-risk verticals and industries.

This structure offers merchants a discount rate under the “qualified” tier. But they will need to pay higher fees for transactions outside that tier.

This pricing model allows businesses to enjoy low rates on only certain cards or transactions while paying higher fees for other types, such as rewards cards.

Additionally, the non-qualified tier may also include higher costs based on features such as transaction size and frequency.

With tiered pricing, even though the qualified rate may seem attractive initially, it usually only applies to a small fraction of transactions. For this reason, merchants should carefully weigh the cost implications before deciding if tiered pricing is right for them.

Interchange-Plus Pricing

Interchange-Plus pricing is a payment processing model that provides businesses with the most cost-effective way to process payments. It offers you lower interchange rates and the ability to predict your fixed fee.

Interchange-plus pricing lets you budget more accurately and get better value for money. It usually works best for businesses in high-risk verticals and industries like retail, e-commerce, hospitality, and travel. It reduces their risk of unexpected costs.

The processor’s fee will depend on monthly transaction volume, industry sector, and processing history.

Membership or Subscription Pricing

Membership or subscription pricing structures are handy for businesses in higher-risk verticals and industries. This type of payment processing offers a fixed monthly fee with an additional charge per transaction—meaning that overall costs may be lower than with other models.

However, when considering this type of pricing, consider the number of transactions and business volume, as it may not always result in savings. And while the processor won’t charge you a percentage-based markup, you will still have to pay the membership fee.

Lower Your Processing Fees With Von Payments

If you’re a business owner in a high-risk vertical or industry looking to reduce your processing fees, you’ll benefit from Von Payments and its Zero-Fee Processing Program.

These PCI-compliant and comprehensive solutions help you avoid the typical interchange and assessment fees charged by most processors and eliminate any additional processing costs that would otherwise be incurred.

Furthermore, Von Payments provide high-risk merchant accounts, so you won’t have to deal with higher processing fees from issuing banks and credit card issuers that perceive your business as having greater risk exposure.

With Von Payments, you’ll save up to 10x on credit card transactions and other digital payments, freeing up capital that can be used for other significant investments.

Plus, Von Payments uses advanced technologies such as tokenization and fraud protection tools to ensure your customers’ highest level of security.

Sign up today to take advantage of these savings!


Payment Processing

A Business Owner’s Guide to Ecommerce Payment Processing

Gone are the days of strictly in-person shopping and swiping cards at physical point-of-sale (POS) systems. 

Are you a business owner struggling to find reliable and secure ecommerce payment processing options? Do you feel frustrated navigating the complex world of financial requirements, compliance, and uncertain costs?

Or maybe you’re overwhelmed by the complexity of e-commerce payment processing regulations and unsure what solutions will work best for your business.

You’re not alone. Many business owners struggle with these same issues.

We’ve created this guide to help small businesses understand ecommerce payment processing so you can find solutions that work for your unique business needs.

In this article, we will dive deep into ecommerce payment processing—how it works and how to choose the best payment solution for you. 

What Is Ecommerce Payment Processing?

Ecommerce payment processing is the process of securely accepting payments from customers online. Businesses can use specialized terminals or ecommerce payment gateways, from credit card payments to online wallets.

Payment processing services streamline ecommerce transactions by connecting customers’ payment details with your business’ bank account, making receiving money in exchange for goods or services much easier and faster.

There are no set-up fees, monthly fees, or long-term contracts like traditional merchant accounts—making it easy for online business owners to get started quickly.

Over 70 percent of ecommerce shoppers abandon shopping carts due to slow or limited payment options. With ecommerce payment processing, businesses can offer customers a wide range of options, including debit cards, credit cards (Visa, Mastercard, American Express), online wallets (Apple Pay, Google Pay), and other digital payment methods (Amazon Pay).

Ecommerce payment processing also adds a layer of security (and complexity) to online transactions since it takes payments through a digital ecommerce platform like Shopify or own ecommerce site.

Transactions are encrypted using secure socket layer (SSL) technology, so personal information is kept safe. And when purchasing online, customers can also use two-factor authentication (2FA) for added peace of mind.

How Does Ecommerce Payment Processing Work?

Here’s how ecommerce payment processing helps business owners provide a smooth checkout experience for online shopping:

  1. You link your ecommerce store with a trusted payment processor.
  2. Customers enter their personal and financial information into a secure form on your website.
  3. Their card details are encrypted and passed to the processor via a secure third-party gateway called a Payment Service Provider (PSP).
  4. The processor requests the consumer’s bank to verify customer identity, whether sufficient funds are available, and whether purchase limits exist.
  5. If everything checks out, the PSP processes the transaction and sends you and your customer confirmation that the purchase was successful. The customer’s account gets deducted.

Make sure that your ecommerce store has all of its security measures and functionalities in place, including SSL certificates, and fraud prevention steps such as data encryption and verification steps at checkout.

Payment Processor

A payment processor facilitates all communication between the customer’s bank or credit card company and the merchant’s account

The payment processor verifies that the customer has sufficient funds before transferring them into the merchant’s account. A payment gateway makes this possible as it securely sends customer information across multiple layers of encryption to protect the customer and merchant from data theft. 

Payment processors also offer features such as fraud detection, dispute management, and compliance solutions, ensuring customers get secure payments every time they shop with you.

Payment Gateway

The payment gateway is an intermediary between your ecommerce store and the payment processor. It securely transfers data between the two entities. 

The payment gateway facilitates authorization or decline information to be sent back to the customer-facing website, allowing customers to check out quickly and securely. 

Payment gateway encrypts sensitive credit card information over an SSL connection—protecting customer data from cybercriminals and malicious actors. 

Ecommerce merchants can choose from various payment gateways depending on their needs. Some of the most popular options are PayPal Payments Pro and Stripe

You may also need to integrate additional features to ensure smooth checkout processes, such as fraud protection tools and loyalty programs.

Merchant Account

This is an account that your online store sets up with a bank so that you can accept digital payments from customers. 

To set up a merchant account, you must partner with a merchant services provider that offers solutions like virtual terminals and digital accounts.

A payment processor and gateway authorize and settle the funds, then deposits them into your merchant account. The funds will transfer to your business bank account in one to two business days. 

Security software then encrypts every transaction to ensure maximum data protection for all parties—merchants, banks, and customers. Banks also use fraud detection services to monitor transactions for potentially fraudulent activity, which helps protect merchants and their customers from unwanted activity. 

Merchant accounts may require additional levels of verification from customers before completing the transaction to ensure all payments being processed are legitimate.

High-Risk Merchant Accounts

High-risk merchants may face more stringent requirements when applying for a merchant account. Businesses in the gaming, entertainment, healthcare, and travel industries are considered high-risk due to their increased propensity for chargebacks, fraudulent transactions, or higher volumes of returns.

As a result, they may be charged higher processing fees than other merchants or need to provide additional documentation to support their application.

High-risk payment processors like Von Payments provide secure platforms to accept payments from shoppers without exposing merchants to financial risk. Von Payments offers various services designed specifically for high-risk merchants looking to improve their chargeback ratio and increase customer satisfaction.

Von Payments’ Chargeback Management enables businesses to address disputes before they become chargebacks with real-time monitoring and alerts. This service also provides helpful data analytics on customer behavior so merchants can identify potential issues before escalating into costly chargebacks.

What is Tokenization?

Tokenization ensures that online payments are secure and efficient for buyers and sellers. It allows businesses to store customers’ sensitive data—such as credit card numbers or bank account details—in an encrypted form. 

With tokenization, businesses don’t have to store payment information in their databases. Instead, they can save an encrypted token pointing to the customer’s details. 

Even when the business suffers a data breach, the stolen information will be useless as it shows no real credit card or bank account numbers.

Tokenization also allows customers to quickly check out without needing to enter their payment information every single time. 

How To Choose the Right Ecommerce Payment Processor

Here are three things you need to consider when choosing the right ecommerce payment processor:


Security is essential in protecting your payment system with an SSL certificate, which encrypts communication and card transactions

You’ll want to ensure that your processor is compliant with the Payment Card Industry Data Security Standard (PCI DSS) and that it follows the regulations set out by credit card companies to ensure your payments are secure. 

Types of Payments Allowed

Select a processor supporting various payment methods like credit and debit cards, PayPal, Google and Apple Pay, Venmo, etc. 

Also, look for processors supporting international currencies, bank accounts, and tax systems in multiple countries. 

Pricing and Fees

When selecting a payment processor, look into the most common fees: 

  • Set-up costs can be free, but the paid ones usually range from $250. Monthly subscription fees cost $10 and $50. 
  • Transaction fees are a percentage of each transaction plus a flat fee, typically no more than 25¢ per transaction. 
  • Some processors may also charge additional fees, such as costs for PCI compliance or additional software integrations. 

Von Payments Is the Answer to Your Ecommerce Business

At Von Payments, we understand how important it is for businesses to have reliable payment solutions that meet their needs. 

Von Payments offers comprehensive ecommerce payment processing solutions, giving you access to various features such as fraud prevention and secure checkout. We also allow customers to pay with multiple currencies and major credit cards, giving them the convenience they demand from an online purchase. 

Von Payments’ simple setup lets you get up and running quickly and easily so you can start accepting payments immediately!

Discover our easy setup process and take advantage of the many benefits of using Von Payments!

Credit Card Processing Payment Processing

Low-Fee Credit Card Processing: What To Know

Credit card processing fees can quickly add up and eat into your profits, which can be an unnecessary expense for small businesses.

Credit card companies like Visa, American Express, and Mastercard apply processing rates that range from 1.5% to 3.5%.

At the same time, it’s also hard to find the best credit card processor that offers low fees. And while there are a few options available in the market today, not knowing what to look for can take up a business owner’s valuable time.

This article will walk you through the benefits of low-fee credit card processing and how to find a suitable processor for your business. Discover the low-cost options for small businesses that want to save on credit card processing fees through low rates and no hidden fees.

What Is Low-Fee Credit Card Processing and How Does It Work?

Low-fee credit card processing allows businesses to accept and settle in-store, online, and mobile payments with credit cards while paying much lower fees than traditional merchant accounts. This type of processing helps businesses save money on payment processing costs, allowing them to keep more revenue from their sales.

Credit card processing fees can vary depending on the type of credit card used, the merchant category code (MCC), and the transaction type. These fees can add up for small businesses and eat into profits. Low-fee processing can reduce these costs by offering lower rates for specific credit card transactions.

Low-fee credit card processing typically works by using an intermediary that aggregates transactions from multiple merchants, reducing the fees for each transaction.


Benefits of Low-Cost Credit Card Processing

When accepting credit card payments, low-cost credit card processing offers many benefits—making it an attractive choice for small and medium-sized businesses.


Avoid monthly fees: With low-fee credit card processing, businesses can avoid expensive monthly fees that can quickly add up and eat into their profits. Low-fee credit card processing saves companies money from hidden fees and additional charges.


Freedom to adjust pricing for your product/service: Low-cost credit card processing gives businesses the flexibility to change their pricing structure and tailor it to the cost of their product or services—enabling them to maximize profits and reinvest more into their business.


Security against invalid charges: Low-fee credit card processing provides an added layer of security, as you will only be charged for legitimate purchases made with valid cards. This shields your business from invalid and fraudulent charges. Some credit card processors offer fraud protection, chargeback management and prevention, and dispute resolution tools.


Invest more into the business: Low-fee credit card processing helps businesses save money on payment processing fees. This enables them to reinvest more of their profits back into their business.


Types of Businesses That Work Well With Low-Fee Processing 

Certain types of businesses are more inclined to use low-fee payment processing solutions.


High-risk merchants are particularly well-suited to take advantage of low-fee payments. They include those with high chargeback fees or greater exposure to fraud, such as:


  • Adult entertainment
  • Nutraceuticals and supplements
  • Travel and tourism
  • Subscription-based services
  • CBD
  • Vape and e-cigarettes
  • Debt consolidation


Because high-risk businesses carry more risk than low-risk merchants, many traditional payment providers shy away from them or charge higher fees.


Low-fee payment providers recognize the need for high-risk merchants to access reliable payment services and offer lower transaction fees.


Small businesses benefit significantly from the cost savings associated with low-fee payment processing.


For small business owners operating on tight budgets, reducing their merchant account fees can significantly improve their profit margins while still providing customers with a convenient way to pay via credit cards, debit cards, and other digital wallets.

What to Look For in a Low-Fee Credit Card Processor

When looking for a low-fee credit card processor, there are several important factors to consider to ensure you get the best service and value for your money.


Some processors offer competitive rates, while others have hidden costs or additional fees such as:

  • Interchange fees (sometimes referred to as interchange rates) are charged by a credit card issuer (bank or other financial institution) to process and complete a transaction.
  • A payment processor charges service fees for providing credit card processing services.
  • Many processors charge set-up fees for setting up a merchant account and providing related services.
  • Credit card networks charge assessment fees, typically a percentage of each transaction.
  • PCI compliance fees cover the costs associated with ensuring your business meets PCI standards
  • Termination fees are charged by some processors when a merchant account is closed.

Choose low-fee payment processors with transparent pricing and options for flat-fee structure instead of tiered pricing models or interchange-plus pricing.

Additionally, review any contract cancellation fees before signing to avoid any surprises down the line.

Point-of-Sale Requirements

Understand what equipment is necessary to process payments. Assess how user-friendly the point of sale or POS system is for customers.

Research different payment terminals and their capability levels, i.e., whether you’ll need additional software (e.g., virtual terminal) or hardware (e.g., credit card reader) to get up and running quickly.

Evaluate how easy they are to use for either card-present or card-not-present (contactless) transactions. Can they quickly and securely process in-person transactions and online payments? Do they have smooth integrations with payment gateways like Square, Stripe, and PayPal?

Setting Up Surcharging

Find out if you can set up surcharging with your chosen provider to pass on credit card fees directly to cardholders. This can be especially helpful for businesses that experience high transaction volumes.

Whether It Fits Your Business Type

Understand whether the credit card processing company provides the necessary services for your business type. Are you in a high-risk industry? If so, you’ll need a processor with a track record of working with high-risk businesses.

For example, industries such as cannabis may require special licensing from state governments for payment processing to occur legally.

Businesses should double-check this before signing a long-term contract with a credit card processor.

Get Zero-Fee Processing with Von Payments 

Von Payments provides a zero-fee credit card processing solution for small businesses and startups, helping them reduce business costs.

With Von Payments, your business can accept all types of payment methods without paying additional fees—all while enjoying the same secure and reliable service as larger companies.

Enjoy reliable high-risk merchant services, fast and easy approvals, no requirement for credit history, and knowledgeable customer support. You can sleep soundly at night, knowing that each customer transaction is handled securely and efficiently.

Contact us to make your e-commerce business more profitable today by switching to low-fee credit card processing with Von Payments!

Payment Processing

Guide to Credit Card Processing for eCommerce

Understanding all the different facets of credit card processing might be challenging, especially if you’re just starting out.

You’re not alone. When selecting a payment gateway and understanding all the various processing fees, many business owners feel overwhelmed.

Even if you’ve been operating your e-commerce company for some time, keeping up with the most recent developments in payment processing is crucial.

A reliable payment partner is essential because fees and rules might change anytime.

This article will cover everything you need to know about processing credit card payments. Dive deep into payment gateways, the common payment processing fees, and how Von Payments can help your e-commerce business succeed.

How Does Credit Card Payment Processing Work?

A good grasp of how credit card payment processing works is essential if you want to accept this form of payment for your e-commerce business. The process of credit card processing companies can seem complicated on the surface, but it doesn’t have to be.

The first step for any e-commerce company is to get a merchant account—a bank account that enables you to accept online payments from customers using their debit or credit cards.

When applying for a merchant account, you must provide information such as the following:

  • Your business name and address
  • What type of goods or services you’re selling
  • Your estimated monthly sales volume
  • Other details like fees, rates, and terms associated with your account

Once approved, the acquiring bank will set up your merchant account—enabling you to authorize, capture and deposit online and mobile payments into your designated bank account. 

This is done by connecting all these components using the right technology, such as payment gateways, virtual terminals, and secure checkout solutions.

When customers enter their payment details at checkout on e-commerce platforms or mobile apps, the data is sent from the gateway or terminal directly to the customer’s issuing bank, where it is checked for authenticity.

The payment processor executes the transaction and transfers funds into your designated bank account.

To ensure that payments are processed quickly and efficiently, merchants must adhere to specific standards such as Payment Card Industry or PCI compliance guidelines. 

These set rules around storing and handling customers’ data and ensure end-to-end encryption throughout the payment process.

Using a Payment Gateway to Help with Credit Card Processing

A payment gateway is an added layer of security and helps merchants process credit card payments efficiently.

The payment gateway serves as an intermediary between the customer and the e-commerce store, ensuring safe and reliable online transactions.

A gateway allows customers to make secure e-commerce payments directly on your online store without being redirected to another page; customers don’t have to leave your site to complete their purchases.

Typically, when a customer wants to purchase something online, the payment gateway verifies their identity and checks if their credit card information is correct. It also collects data from the issuing bank to determine whether the transaction is approved or declined.

Furthermore, it encrypts sensitive data such as credit card numbers and personal information for extra security measures. 

As a result of these highly secure practices, customers can feel safe when making online purchases on websites that use a payment gateway for their transactions.

A payment gateway provides an invaluable asset for online stores by cutting down on fraud risk and increasing consumer confidence in your business.

Common Credit Card Processing Fees

When processing payments with credit cards, there are various fees that businesses should be aware of. These fees can vary depending on the payment processor and the type of services used.

Standard fees for credit card processing include transaction fees, gateway fees, interchange rates, statement fees, and assessment fees. Other less common fees may also include setup fees, termination fees/cancellation fees, etc.

Transaction Fees

Transaction fees are the most common fee associated with credit card processing.

Usually, a flat fee per transaction or interchange plus pricing is applied for each sale processed through the payment processor. This fee covers securely transferring funds from the customer’s bank account to the vendor’s account.

Transaction fees typically range from 0%–5% depending on the processor and services used.

Gateway Fees

Gateway fees are typically charged when using an external payment gateway such as PayPal or Stripe to process payments online.

Gateway fees are usually calculated as a flat monthly rate plus a small percentage per transaction and typically range from 1%–3.5%.

Interchange Rates

Interchange rates refer to what is known as “swipe” or “card-present” transactions and involve customers swiping their cards at point–of–sale terminals (POS).

These are standard payment processing charges assessed by a merchant’s chosen processor whenever they accept payments via debit or credit cards.

Visa, Mastercard, and other credit card companies set interchange fees. They typically range from 1–3.5% of each completed transaction, specifically as follows:

  • Visa: 1.4% to 2.5% for credit cards and .05% for debit cards
  • MasterCard: 1.5% to 2.6% for credit cards and .05% for debit cards
  • American Express: 2.3% to 3.5% for credit cards and .05% for debit cards
  • Discover: 1.55% to 2.5% for credit cards and .05% for debit cards

Statement Fees

Statement Fees are charges that may appear on your monthly statement for each month you accept payments via credit card.

Many credit card processors offer discounts if you sign up for auto-billing or commit to transactions above a certain amount each month. However, some processors may still charge statement fees regardless if these conditions are met.

Statement fees usually range anywhere from $5–$30/month, depending on the services used.

Assessment Fees

Assessment fees refer to extra charges imposed by card issuers that cover costs associated with maintaining fraud prevention systems, processing card networks, etc.

They generally amount to around 0.11%–0.13% per transaction, regardless of whether it was conducted online (card-not-present) or by swiping at POS terminals in-store.

Chargeback Fees

Chargeback fees are another type of fee that businesses may encounter when using a credit card processor. 

This fee is charged to merchants when customers dispute an unauthorized or fraudulent transaction on their statement and request a refund from their credit card issuer.

The chargeback fee covers any associated costs incurred by the merchant’s processor in handling this dispute process and typically ranges from $15-$50, depending on the issuing bank or financial institution. 

Authorization Fees

Authorization fees cover any expenses related to verifying a customer’s identity information when making purchases with credit cards or ACH payments via automated clearing house networks like PayPal or Venmo.

Authorization fees generally range between $0.05–$0.20 per transaction, depending on which service provider is used for authentication purposes.

Some providers charge even higher rates for businesses operating in more high-risk industries, such as gaming or adult entertainment businesses.

Some processors may also assess additional flat-rate authorization fees if specific criteria, like online purchases over a certain value amount, are met by customers making transactions with their cards at point-of-sale locations. 

Subscription Fees

Subscription fees are typically associated with payment gateways or merchant accounts that require a business to sign up for an ongoing subscription agreement to access its services.

Subscription fees vary depending on the service provider, but they usually range from $20–$200 monthly fees depending on features available and the types of transactions being processed.

How Much are Payment Processing Fees?

Depending on the payment processor they choose, e-commerce credit card processing can come with various fees.


Stripe charges a 2.9% + $0.30 fee per successful credit card charge. This fee applies to online and in-person transactions for Visa, Mastercard, American Express, Discover, and other supported payment options.

Stripe also charges a 1.5% fee for international payments such as Google Pay or Apple Pay.


PayPal has similar payment processing fees with a couple of differences. They charge a flat 2.99% + $0.49 fixed fee per successful credit card charge with an additional 1.5% per transaction when using PayPal’s currency conversion service (if applicable).

There may also be other costs when using PayPal’s merchant services, like accepting QR code transactions or Venmo payments.


Square offers a competitive pricing structure with their flat 2.6% + $0.10 fee per successful credit card charge plus an additional 1.5% if you use their instant transfers functionality—allowing merchants to receive funds within minutes instead of days.


Shopify offers tiered pricing models that vary based on what features you need from the platform and what type of product you’re selling (eCommerce store or retail shop).

The basic plan (which is ideal for small businesses or those with low volume sales)  starts at 2.9% + $0.30 fee per successful credit card charge along with an additional 0-2% depending on whether your customers check out through Shopify. 

Payments or another third-party processor such as Stripe or Paypal (note: this does not apply for brick-and-mortar stores).

Higher-tier plans offer lower rates. They go from 0% to 1%, which is better for high-volume e-commerce businesses that process thousands of orders each month and want to save on transaction costs.

Von Payments Can Help With Credit Card Processing for Your e-Commerce Businesses

Credit card processing services include authorizing, clearing, and settling payments, which are all crucial elements of running a successful online business.

If your business needs a reliable way to process credit cards, you should consider partnering with Von Payments for merchant accounts and streamlined payment processing services.

Von Payments offers PCI-compliant payment gateways and uses tokenization technology to ensure secure credit card transactions. Von Payments also provides fraud prevention tools to help protect businesses from unwanted chargebacks or fraudulent activity.

Our payment solutions are designed to be user-friendly, with easy API integrations into existing payment systems so your business can run seamlessly and without extra hidden fees.

With these features in mind, it’s no surprise that many businesses trust Von Payments as their merchant services provider—with reliable credit card processing solutions for eCommerce stores.

Contact us today to learn more.


Payment Processing

The Ins and Outs of Credit Card Processing

What is Credit Card Processing?

Credit card processing is a service through which businesses accept payments from their customers through credit cards.

27% of transactions in e-commerce and in-person checkout in retail are completed via credit card payments, making it one of the most popular payment methods.

Credit card payments are a preferred contactless payment method as they enable consumers to get the most out of their bank accounts via reward points, cashback, etc.

In this article, you’ll learn how these payments work, the various fees involved in a transaction, credit card processing pricing, and how you should pick the right credit card processing and point-of-sale (POS) system.

How Does Credit Card Processing Work?

Credit card transactions between the cardholder and businesses contain the following moving parts:

  • Consumer: The cardholder or the customer
  • Merchant: The business owners
  • Payment Gateway: The mechanism which authorizes the checkout transaction during credit card processing
  • Credit Card Processor: The virtual terminal, credit card reader, or payment processor which is the medium between the consumer and the merchant
  • Card Network: It is a system that enables and facilitates credit card payments during e-commerce transactions
  • Issuing Bank: The bank of the cardholder
  • Acquiring Bank: The bank with the merchant account

The credit card payment processing is shown in the image below:


Before choosing a credit card processing company, let’s understand the transaction fees during the payment processing of credit cards.

Pricing for Credit Card Processing

Credit card processing fees should be taken into consideration before choosing a credit card processing company. These are added to the bill during invoicing and are popularly known as “hidden fees”. Below are the most common types of such fees:

  • Interchange fee: Also known as interchange-plus pricing, these make up most of the transaction fees. This fee is paid between banks to process payments. In the US, the interchange fees are about 2% of the total transaction amount.
  • Service fee: This is charged by the business and covers customer support, transactions, and business development. The service fees charged depend on the business or service provider and the industry.
  • Processing fee: It is charged by your bank for the privilege of using credit cards. Companies charge a flat rate per transaction, but it usually varies.
  • PCI compliance fee: It is charged by your payment processor or virtual terminal to ensure the merchant is compliant with the PCI DSS standards.
  • Chargeback fee: This credit card processing fee is charged by the bank from the merchant account while reimbursing the customer for a fraudulent transaction. Merchants can also dispute a chargeback fee which ensures small businesses aren’t taken advantage of.


The inclusion of all the above kinds of fees in the credit card pricing model decreases the profit of the merchant. As a result, small business owners prefer to offer and promote cash payment, or by passing on the processing fee to customers in exchange for their merchant services.

Choosing a Credit Card Processing Company

Credit card processors receive and validate the cardholder’s information and the transaction details to ensure the credit card transactions are secure. These processors accept the details through the virtual terminal and relay them to credit card net card networks for payment processing.

They protect the data of the consumer and transfer the accurate amount to the merchant bank.

Credit card processing companies, like MasterCard and Visa, build devices and systems to facilitate these processing services. 

Choosing the right company will have the following benefits:

  1. Fraud protection and security: As a business owner, it is not just your responsibility to accept payments from verified sources, but also to protect your customers from financial fraud. A good payment processor will send funds to your merchant account while decreasing the risk associated with these transactions.
  2. Merchant services: This is about the convenience offered by their solution. For instance, the payment processing solution should allow you to offer multiple payment options to your consumers including debit cards, in-person cash payments, and mobile payments. Another factor you should consider is hidden fees and monthly fees.
  3. Customer support: Small businesses, for example, can find it difficult to rely on credit card processors that take a few business days to get their tickets resolved. They need cash as soon as possible to repay the overhead costs. A credit card processing company should ensure smooth cash flow through your business as per your pricing model.

Von Payments, one of the best credit card processing companies, provides all of the above to startups and established businesses across a wide range of industries.

We provide credit card transaction processing services to every business from low to high-risk non-traditional verticals. With Von Payments, you can accept payments from your customers via mobile wallets, Google Pay, Apple Pay, debit cards, credit cards, and more. You can accept credit card payments from leading providers such as Visa, MasterCard, American Express, etc. Any and all processing fees would be passed on to the customer, which is a strong benefit for merchants.

Furthermore, we will assist you through every step to give you the best merchant services by assigning a dedicated account manager.

Finding the Right Point-of-Sale (POS) System

A point-of-sale system (POS system) refers to the hardware and software that accepts payments from your customers during shopping cart checkout. A common example is the cash register. However, the POS system has come a long way since.


Keep the following points in mind while choosing a POS system:

  1. Customer experience: It should manage and store customers’ data securely and incur minimal transaction fees. They should also be allowed to make online payments and make payments through third-party portals like Stripe.
  2. Adaptability: If you are accepting payments through certain means, your point-of-sale system should incorporate that seamlessly. You shouldn’t have to change how you interact with your consumers to make a payment service system work even if you are a non-traditional, high-risk business.
  3. Scalability: Your POS system should be able to address the growing needs of your business. For instance, introducing a mobile device to improve the in-store experience for your customers should be easy.
  4. Affordable: Interchange-plus pricing, monthly subscription processing fees, and taxes per transaction make many POS systems an unfriendly option for low and high-risk businesses alike. Make sure the pricing model of the POS system doesn’t drain your revenue significantly.

Now that you know what you should look for in a credit card processing company and POS system for your business, it is time to choose the right one.

Choose Von Payments for Zero Fee Payment Processing

Credit card payments are a popular method of completing e-commerce and retail transactions. The payments are authenticated through credit card networks which charge interchange fees and taxes to transfer the funds. However, these extra fees can make them undesirable for your business.

This is where you must choose the best credit card processing company which is secure, adaptive, transparent, easy to use, and scalable as per your needs.

Von Payments’ zero-fee processing platform maximizes your bottom line by passing off transaction fees incurred in processing credit cards to your customers.

Your customers can either pay by cash, which will be at a discounted rate, or by credit card where the customer has to pay the convenience fees.

Our platform is secure, takes minutes to set up and run, adaptive, scalable, and compliant with all the latest regulations in all 50 states.

Contact us today and we will get you started in no time.

Zero Fee Processing

Zero Fee Processing: How Does That Work?

What is Zero Fee Credit Card Processing?

Fees, often heavy, are a part of doing business. Companies of all sizes pay different kinds of fees while accepting payments from their customers to their banks. Usually, this fee is highest for credit cards.


Credit card processing fees are the extra amount that banks levy from merchants for the privilege of enabling credit card transactions. Interchange fees, PCI compliance fees, chargeback fees, and service fees are some of them.


Zero-fee credit card processing is a method of making a credit card transaction with no extra processing costs for the merchant. This payment processing method is a benefit for small business owners which helps boost their revenue.


In this article, let’s look into how it is different from the surcharged credit card payment processing method, how it works, and what benefits you can look forward to.

Surcharge vs. Zero Fee Credit Card Processing

Businesses pay an additional fee to their banks for merchant services (credit card processing) which is typically 3-4% of the entire transaction. These are known as credit card processing fees or surcharges that are deducted from your merchant account.


These extra transaction fees can make it difficult for small business owners, in particular, to make a profit. To cover these credit card processing costs and improve their bottom lines, businesses modify their pricing structure and make their customers pay, as shown below.

example of surcharge on a receipt



Understandably, credit card surcharging disappoints cardholders and there are still fees to the business owner. 


Fortunately, there is a simple solution that can be used by both e-commerce brands and businesses that serve their customers in-store.


Zero-fee credit card processing allows even small business owners to offer merchant services to their customers for no extra fees to the business owner. Such credit card processing solutions improve your revenue while satisfying your customers at the same time.

How No-Fee Credit Card Processing Works

Free credit card processing works in two distinct ways.


One, the customer pays for access to the merchant services in exchange for bank rewards. The rewards offered by the banks depend on the card brands. Even though the customers have to pay credit card processing fees, they will get value in return by using their preferred method of payment.


The additional amount paid by the customers is usually called a convenience fee. It is quite common for merchants to shift this to their customers as the latter get rewards from their banks such as cashback, offers, discounts, and coupons. Businesses use a notice like the following to let customers know about it beforehand:




Two, the merchant (i.e. you) offers a cash discount program to incentivize customers to pay in cash without making any edits to the pricing model. A lot of businesses put up notices like the following to let their customers know about the discount:




Using such no-cost credit card payment processors brings three crucial advantages for your business.

Benefits of Zero Fee Credit Card Processing

Zero-fee credit card payment processing have both short and long-term advantages.

1. Lower Credit Card Processing Fees for Your Business

Zero-fee credit card processing decreases your credit card processing fees by:


  • Incentivizing your customers to pay with cash instead of using a card. Leverage the cash discount program as it will charge less.
  • Enabling you to explore and consider different point-of-sale (POS) solutions that are more economical for your business.


You will also save more as you will be taxed less on your merchant account and will pay fewer additional charges such as PCI compliance fees and chargeback fees if your customers opt to pay cash, instead of by using any cards. 


Another benefit of cash discount programs is that your customers are more likely to return or recommend your business to more of their friends who love leveraging reward programs. 

2. Invest More Profits Back into the Business

As a business owner, your aim is to expand your business. Broadly, this means serving more customers and/or satisfying more needs for each customer. To do so, you need to invest your profits back into technology and human resources.


The degree of investment depends on how much profit you make. In the previous benefit of zero-fee processing programs, we touched upon how it decreases your overhead costs and boosts your margins.


This additional surplus cash will bring you more investment opportunities. You can either build more products, offer more services, improve your current products and services, or increase your production or service capacity. Limited profits decrease your options for expansion.

3. Freedom to Adjust Pricing of Your Product or Service

The pricing of your products and services depends on the following factors:


  • Your competitors’ pricing.
  • The value obtained by the customer.
  • Transaction costs.
  • The investment required to build the product or offer the service.
  • Other costs such as marketing, sales, customer service, etc.


The first three factors are out of your control, which makes it challenging for you to control your pricing model fully. Monthly fees for payment processing increase the costs of your products and services which can drive your customers away and/or decrease their lifetime value.


Zero-cost payment processors give you more freedom by removing an external factor that directly affects your pricing strategies. This helps all types of businesses from any domain gain a competitive edge while charging their customers.


Now, the challenge in front of you is to choose a credit card processing company that meets all your business needs. It should accept all the credit cards such as MasterCard and Visa, deposit money into your merchant account via ACH deposits, and be compliant with all the regulations.


Fortunately, there is a solution that provides all of the above.

Elevate Your Business with Von Payments’ Zero Fee Payment Processing

Zero-fee payment processing empowers your customers to pay for your products or services in the payment method of their choice while costing you nothing. Furthermore, it decreases your cash-handling costs while increasing customer satisfaction.


This payment processing method works in two ways. First, it charges extra fees to the customers. Second, it incentivizes the customers to use the cash discount program where the business owner will get paid in cash and cut out the processing fees. 


Zero-fee processing has three distinct benefits for businesses of all sizes — it decreases your credit card processing costs, enables you to invest more into your business, and gives you more control over your pricing strategies.


Von Payments offers zero-fee payment processing solutions for businesses of all sizes. We aim to empower even non-traditional companies in high-risk domains to offer their customers a reliable, economical, and dynamic payment processing solution.


Give us a call and we will build a customized solution to meet all your needs.