Understanding the various types of point-of-sale (POS) fees is essential for businesses, to effectively manage their finances, and optimize their costs. Here is a comprehensive overview of the common types of fees that may “ding” you next time you cash a purchase:

Transaction Fees:

Each time you cash out something, POS service providers may get a piece of the “pie.” So ensure you know how much each “tap” or “swipe” costs you so you do not think you are making more money than you actually are. Typical fees include:

• Credit card processing: these may include a percentage of the transaction amount (e.g., 2.9%) plus a flat fee per transaction (e.g., $0.30). The exact rate may vary based on the card provider, and transaction method (eg. swipe, key-in, or online; etc…).
• Debit card processing: similar to credit cards, but often at a lower cost
• International transaction: applied when a customer’s credit card is used outside the country where the transaction is processed

Monthly Fees:

Wait there’s more… On top of transaction fees, you could also be responsible for paying a monthly fee to your POS system provider for use of their software, and services. These fees may be made up of:

• Software subscription(s): these fees are known to be associated with things like: access to POS software updates; customer support; and additional system features like, analytics, and inventory management
• Hardware rental: charges associated your use but not ownership of the hardware you utilize for your POS system. These may be charged on, terminal; card reader; and tablet usage

Setup and Installation Fees:

To ensure that your POS system is set-up properly, many people utilize the expertise of their service provider to get the job done right. Obviously, this comes with a price. These fees may cover:

• Hardware setup
• Software installation

PCI Compliance Fees:

Payment Card Industry Data Security Standard (PCI DSS) compliance is mandatory for businesses handling credit card information. Providers may charge a fee to ensure your POS system meets these standards.

Chargeback Fees:

Chargebacks occur when a customer disputes a transaction and then secures a refund through their credit card provider When this happens, the business owner may be charged an administrative fee by the POS system provider to accommodate the reversal.

Cancellation/Early Termination Fees:

POS contracts may include penalties for cancelling or terminating services before the agreed-upon contract term ends. These fees can vary widely, and should be reviewed carefully before signing any agreements.

Additional Service Fees:

Depending on the POS provider, and the specific services used, businesses may encounter additional fees such as:

• Customer support: in order to ensure you get the help you need (eg. disputed charges), you may need to pay an additional cost to have access to this assistance.
• Customization/integration fees: As POS systems become more complex, having all of your tools working as one becomes increasingly more difficult. Because this is the case, POS service providers may charge you a fee to set-up your tool mix; utilizing their expertise.