Per Transfer Fees

Per Transfer Fees, also commonly referred to as authorization fees, are transaction-specific fees paid by a merchant to their merchant bank or another contracted financial entity every time a transaction is processed. These fees are a fundamental component of the financial agreements between merchants and the entities that process transactions on their behalf.

These fees are charged on a per-transaction basis, regardless of the transaction's outcome—whether it is approved, declined, or voided. The fee covers the cost of using the banking or payment network infrastructure to check the validity of the payment method, confirm availability of funds, and authorize the transaction. It essentially compensates the service provider for the electronic processing of each transaction.

Per Transfer Fees are part of the broader spectrum of costs involved in accepting electronic payments, including debit and credit cards. They are separate from other charges such as interchange fees, which are paid to the card-issuing bank, and assessment fees, which are paid to the card networks like Visa and MasterCard.

For merchants, understanding the structure and impact of Per Transfer Fees is crucial as these can significantly affect the overall cost of providing card payment facilities, especially for businesses with high transaction volumes or low average transaction values. Managing these costs effectively is an important aspect of financial planning for merchants.