Junk Fees
Low-dollar recurring fees added to merchant statements that are not required by card networks. They are pure processor margin with no corresponding service.
Junk fees are the line items on your processing statement that have no corresponding cost from Visa, Mastercard, or any card network. They are invented by processors and added to merchant agreements with minimal disclosure. Common examples include: PCI non-compliance fee ($20–$50/month), annual fee ($99–$299/year), statement fee ($7–$15/month), regulatory compliance fee, network access fee, account maintenance fee, and batch fee.
Individually these fees seem small. Combined, they often add $400–$1,200/year to a merchant's costs. For small businesses, that can represent 10–20% of their total processing bill.
PCI non-compliance is the most egregious. Processors charge merchants a monthly fee for not completing PCI compliance questionnaires, then make the questionnaire difficult to find and complete. The fee is pure margin with no value delivered.
When FT5 analyzes a merchant statement, we flag every junk fee and include the total in the savings calculation. Competitive processors eliminate most or all of these fees as a condition of winning the bid.
Run your eye down your statement looking for anything that isn't interchange, assessments, or processor markup. Everything else is potentially negotiable or eliminable.
See how your effective rate compares to what competitive IC+ pricing would cost you.
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