Annual Fee
A yearly charge assessed by payment processors for maintaining a merchant account, typically ranging from $50 to $300 or more, billed once per year in addition to other processing fees.
The annual fee is a once-yearly charge that processors claim covers the administrative costs of maintaining a merchant account over the course of the year. Like statement fees and monthly minimums, annual fees represent recurring revenue for processors rather than costs directly tied to transaction processing. The fee amount varies significantly based on processor, merchant risk profile, and business type.
Annual fees typically range from $50 to $150 for standard merchant accounts, though high-risk merchants may face annual fees of $300-$500 or more. Some processors charge annual fees in addition to monthly fees, effectively collecting both types of account maintenance charges. The fee usually appears on statements in the anniversary month of account opening, though some processors bill it in January regardless of account opening date.
This fee is highly negotiable, particularly for merchants with strong processing volumes or multiple years of positive account history. Many competitive processors do not charge annual fees at all, using the absence of this fee as a selling point. Merchants should confirm whether annual fees exist before signing processor agreements, as some contracts bury annual fee disclosures in fine print. When comparing processor costs, annual fees should be divided by 12 and added to average monthly costs for accurate total cost comparison.
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3D Secure
An authentication protocol for online card transactions that adds an additional verification layer between the cardholder and issuing bank, shifting fraud liability from merchants to card issuers when properly implemented.
ACH Payment
Automated Clearing House payment is an electronic bank-to-bank payment method that transfers funds directly between bank accounts through the ACH network, typically used for direct deposits, bill payments, and recurring transactions.
Acquirer
A financial institution that processes credit card payments on behalf of merchants, maintains merchant accounts, and facilitates the settlement of funds from card-issuing banks to merchant bank accounts.
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A fraud prevention tool that compares the numeric portions of a billing address provided during a transaction against the address registered with the card-issuing bank, returning match result codes to help merchants assess transaction risk.
Aggregator
A payment service provider that enables multiple merchants to process card transactions under a single master merchant account rather than each merchant having their own dedicated merchant account, common with services like Square, Stripe, and PayPal.