Merchant Fees Explained
At Pepper Pay, we believe transparency is essential. That’s why we want every merchant to fully understand the types of fees that may appear on your statement — what they mean, how they’re calculated, and when they’re applied.
Here’s a breakdown of the most common merchant fees and how they fit into your overall pricing structure.
Core Processing Fees
These are the standard fees associated with processing credit, debit, and prepaid card transactions.
| Fee Type | Description |
|---|---|
| Discount Rate | A percentage of each transaction (flat rate, tiered, or IC+) |
| Transaction Fee | A fixed amount per successful transaction processed |
| Interchange Fees | Non-negotiable card network fees passed through to the merchant – only when on IC+ pricing model |
| Card Brand Fees | Small pass-through charges from Visa, Mastercard, Discover, Amex, etc. Apply on all pricing models |
Authorization Fees
| Fee Type | Description |
|---|---|
| Authorization Fee | Charged each time a card is authorized, even if not settled |
| AVS Fee | Address Verification Service, often used for fraud prevention |
| Voice Auth/IVR Fee | Applies if authorization is completed via phone or interactive system |
Settlement Fees
| Fee Type | Description |
|---|---|
| Batch Fee | Charged for each batch settlement submitted (usually once daily) |
Monthly & Annual Service Fees
| Fee Type | Description |
|---|---|
| Monthly Maintenance Fee | Ongoing system and account maintenance |
| Portal Access Fee | Access to Pepper Pay’s online merchant portal and reporting tools |
| Monthly Minimum Fee | If total monthly discount fees fall below a certain threshold, this fee makes up the difference |
| Annual Fee | Once-per-year platform fee |
Dispute & Risk-Related Fees
| Fee Type | Description |
|---|---|
| Chargeback Fee | Assessed when a customer disputes a transaction |
| Chargeback Reversal Fee | If a chargeback is successfully reversed, this fee may apply |
| Arbitration Fee | Incurred if a dispute escalates beyond standard chargeback handling |
| Retrieval Fee | Assessed when a cardholder's bank requests documentation |
| PCI Non-Compliance Fee | Applied if the merchant fails to complete required PCI compliance steps |
| G2 Monitoring Fee | Monitoring service used for high-risk merchants or MCCs |
Optional & Technology Fees (If selected)
These fees apply only if you're enrolled in optional services through Pepper Pay. For more detailed breakdown of the services, please reach out to support@pepperpay.com
| Service | May Include |
|---|---|
| Gateway Services | Setup fees, per-transaction fees, monthly fees for hosted gateway access |
| Tokenization & Vaulting | Secure card data storage, customer vault fees, account updater tools |
| 3D Secure / Payer Auth | Per-verification attempt, typically used for eCommerce fraud prevention |
| Dual Pricing & Cash Discount | Licensing fee if using compliant dual pricing strategies |
| SMS & Promotional Tools | Per-text charge for receipts, promotions, or alerts |
| Invoicing | Fees for sending, updating, and processing invoices |
| POS Software Fees | Monthly software licensing for terminal-based solutions |
These fees are disclosed and confirmed during the setup. If you're unsure about which services you're currently subscribed to, Pepper Pay can walk you through your current setup.
Want a Simplified Fee Structure?
Pepper Pay offers multiple pricing models:
- Interchange Plus: Transparent, itemized fees
- Flat Rate: One consistent rate per transaction
- Tiered Pricing: Based on card type and risk category
You can also choose how and when you’re billed:
- Daily Discount (fees deducted daily)
- Net Settlement (fees deducted before deposit)
- Monthly Discount (one monthly charge for all fees)
If you ever want to review or update your pricing setup, just reach out — we’re happy to help you find the best fit.
support@pepperpay.com; 786-358-9338 option 3