American Express, Discover and Other Credit Card Transaction Fees

Frequently Asked Merchant Account Questions and Answers

4. What kind of fee does American Express and Discover charge?

There are absolutely no setup fees with American Express. You will usually fill out an application for Discover at the same time you fill out your application with Visa and MasterCard. American Express offers two different tiered pricing plans.

Discount Rate - If you choose this plan type you will pay American Express a small 3% fee and is based on your industry and average ticket size. Card Swipe and Card Keyed transactions are not differentiated by American Express like they are with Visa or MasterCard.

Flat Fee - This is where you pay a flat monthly fee of only $5.00 without any other charges and you do not pay an amount for each American Express sale. In order to qualify for this plan your business must make less then $5,000 in annual American Express sales and be able to authorize, submit and receive payments electronically.

Statement Fees – Fortunately there is no charge for a statement fee by American Express. There is a tiered pricing plan that is offered by Discover based on the three types of businesses which include internet or home based businesses, restaurants, and retail businesses. Listed below is a breakdown of the various discount rates based on the business type.

Restaurant Businesses

Average ticket $00 to $20, your rate is 2.18% + 8 cents
$21 to $30, your rate is 1.93% + 8 cents
$31 to $50, your rate is 1.73% + 8 cents
$51 to $70, your rate is 1.62% + 8 cents
$71 to $90, your rate is 1.57% + 8 cents
$91 to $120, your rate is 1.55% + 8 cents
$121 to $150, your rate is 1.51 % + 8 cents
$151 and above, your rate is 1.49% + 8 cents

Retail Businesses:

Average ticket $00 to $20, your rate is 2.52% + 8 cents
$21 to $30, your rate is 2.22% + 8 cents
$31 to $50, your rate is 1.99% + 8 cents
$51 to $70, your rate is 1.86% + 8 cents
$71 to $90, your rate is 1.80% + 8 cents
$91 to $120, your rate is 1.77% + 8 cents
$121 to $150, your rate is 1.73% + 8 cents
$151 and above, your rate is 1.69% + 8 cents

Internet & Mail Order; Out-of-Home Businesses

Average ticket $00 to $20, your rate is 2.97% + 8 cents
$21 to $30, your rate is 2.67% + 8 cents
$31 to $50, your rate is 2.44% + 8 cents
$51 to $70, your rate is 2.31 % + 8 cents
$71 to $90, your rate is 2.25% + 8 cents
$91 to $120, your rate is 2.22% + 8 cents
$121 to $150, your rate is 2.18% + 8 cents
$151 and above, your rate is 2.14% + 8 cents

General Information

1. What exactly is a Merchant Account and do I really need to have one?

2. What other options are available ?

3. Is it necessary to accept credit cards ?

4. When I make a credit card sale how do I get the money ?

5. Can I apply for a merchant account at a bank ?

6. When looking for a merchant account provider how do I find the right one?

7. What information do I need to provide to set up a merchant account?

8. What is a high risk processor what makes them risky?

9. I plan to open an online store what must I know about processing credit cards online?

10. If someone wants to make a check payment on my site can I process it?

11. How do I implement the payment process on my website?

Fees/Expenses

1. What other fees are involved not listed on the site?

2. Are there any other fees you aren't mentioning on the site?

3. Why are American Express and Discover more expensive when they aren't as widely used like Mastercard and Visa?

4. What kind of fee does American Express and Discover charge?

5. What is the best price to pay for a digital terminal or software?

6. I don't have very much start up cashflow but would like to start right away what should I do first?

7. What can I do to prevent chargebacks and credit card fraud?

Risks and Safety

1. Is it risky to accept checks as I know some people refuse to pay with a credit card.

2. If I decide to accept checks what other pertinent information should I know first?

3. Is it possible to accept check payments on my website?

4. How safe is it to accept credit card payments over the internet? Is it really secure?

5. How can i reduce the risk of accepting bad or fraudulent credit cards?

More Information

1. If I already have a terminal is it possible I can have it programmed with my new merchant account provider?

2. Am I able to process Foreign, Government or Corporate credit cards?

3. If I have a retail business is it a good idea to accept debit or check cashing cards?

4. What is real time processing and electronic terminals? How about software?

5. Virtual terminal? What is that exactly?

6. Does a virtual terminal allow you to process checks?