What is a Transaction Fee?
Transaction fees are charges that businesses incur when processing payments. These fees are typically a small percentage of the transaction amount, plus a fixed fee. They are essential for maintaining the infrastructure that enables secure and efficient payment processing.
How Transaction Fees Work
Transaction fees are applied every time a payment is processed. This includes credit card, debit card, and digital wallet transactions. The fee is divided among the entities involved in the transaction, such as the issuing bank, the credit card network, and the payment processor.
The Role of Transaction Fees in Business
While transaction fees may seem like an additional expense, they play a crucial role in facilitating secure and reliable payment transactions. They cover the costs of anti-fraud measures, transaction processing, and the maintenance of payment systems. Understanding these fees can help businesses manage their expenses and make informed decisions about their payment processing solutions.