As a merchant, you have to constantly monitor the money that comes out of your pocket. Finding any way possible to save money is beneficial for any business. When it comes to payment processing, you’ll often pay any combination of setup fees, application fees, monthly fees, monthly minimums, PCI compliance fees, transaction fees and annual fees. Merchant credit card processors will offer you a discount rate (i.e. the percentage taken out of each sale that you process) on credit card transactions. However, not all discount rates are the same.

A discount rate is a small percentage of each transaction that is paid in order to accept credit card transactions. You pay this small percentage to the credit card processor. Many merchant account providers base this percentage on variables such as your evaluated risk, types of transactions, or your overall sales volume. The industry standard discount rate for processing z credit cards on the Internet or as a “keyed in” sale is between 2.29 and 2.99 percent. MerchantPlus, a leading merchant account services provider offers a rate of 2.15 percent, quite competitive with the industry standard.

When determining if a particular discount rate will benefit your business, consider the price of your average sale and your transaction fee. Take your per transaction fee and divide it by your average sale price plus your discount rate. You’ll end up with an approximation for what you’ll pay per each transaction.