Glossary

Merchant Service Charge (MSC)

What is a merchant service charge?

Merchant Service Charge is a fee paid by the merchant to the acquiring financial organization. This fee is influenced by a wide range of aspects. Among these aspects are regulated/ unregulated debit, card type, capture approach, channel, the location of the holder, merchant’s field of trade and capacity.

So, the amount of the merchant service charge usually depends on the card type and brand, location and normal transaction cost which will influence the additional underlying fees except a vendor’s obligatory charges. The obligatory fees are a variable element of the merchant service charge. Vendors can experience the risks to pay more funds than they have to because of the acquirers. The latter may try to over-charge traders beyond the provided scheme charges.

Merchant service charges are different in different countries. So, the trader must remember that the amount of money that he/she needs to pay can exceed the merchant country’s fees.

Merchants need to understand that the fee doesn’t fully go to the payment processor. The merchant service charge composes from three main elements:

  • The interchange fee that goes to the issuing bank,
  • The network fee that goes directly to Visa or Mastercard,
  • The acquirer fee that goes to the acquiring bank.

These parties will influence the final amount of the merchant service fee.

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