What is Elavon Service Fee?
Elavon service fee refers to the charges imposed by Elavon, a leading global payments processor, on businesses that use its payment processing services. These fees are designed to cover the costs associated with processing credit and debit card transactions, ensuring smooth and secure transactions for both merchants and customers. Understanding the various components of the Elavon service fee is crucial for businesses to manage their payment processing expenses effectively. In this article, we will delve into the details of Elavon service fees, including their types, factors influencing them, and how businesses can optimize their payment processing costs.
Types of Elavon Service Fees
Elavon service fees can be categorized into several types, each serving a specific purpose in the payment processing ecosystem. The most common types of Elavon service fees include:
1. Transaction Fees: These fees are charged per transaction processed through Elavon’s payment gateway. They are a fixed amount per transaction and are typically determined by the type of card used (credit, debit, etc.) and the card network (Visa, Mastercard, etc.).
2. Interchange Fees: Interchange fees are paid to the card-issuing bank and are determined by the card network. They vary based on the type of card, the transaction amount, and the cardholder’s country of residence. Elavon collects these fees on behalf of the card-issuing banks.
3. Assessment Fees: Assessment fees are charged by the card networks (Visa, Mastercard, etc.) to support the ongoing operations and development of the networks. Elavon collects these fees from merchants and passes them on to the card networks.
4. Monthly Fees: Some Elavon payment processing plans may include a monthly fee, which covers the cost of the payment gateway and other services provided by Elavon.
5. Terminal Fees: If a business uses a physical terminal provided by Elavon, there may be additional fees associated with the terminal, such as an activation fee or a monthly rental fee.
Factors Influencing Elavon Service Fees
Several factors can influence the Elavon service fees a business pays, including:
1. Merchant Category Code (MCC): The MCC is a code assigned to a business based on the type of goods or services it offers. Different MCCs may have varying interchange rates and, consequently, different service fees.
2. Card Type: The type of card used for a transaction (credit, debit, etc.) can affect the interchange rate and, in turn, the service fees.
3. Transaction Amount: The amount of a transaction can impact the interchange rate and, subsequently, the service fees.
4. Cardholder’s Country of Residence: Interchange rates and service fees can vary based on the cardholder’s country of residence.
5. Payment Processing Volume: The volume of transactions processed by a business can influence the overall cost of payment processing, including Elavon service fees.
Optimizing Payment Processing Costs
To optimize payment processing costs and minimize Elavon service fees, businesses can consider the following strategies:
1. Negotiate Interchange Plus Pricing: Instead of paying a flat rate for each transaction, businesses can negotiate interchange plus pricing, which includes the interchange fee and a small markup. This can help reduce overall costs.
2. Implement a Terminal Management Program: Utilize Elavon’s terminal management program to keep track of terminal usage and ensure that the correct fees are applied.
3. Analyze Transaction Data: Regularly review transaction data to identify trends and areas where costs can be reduced.
4. Choose the Right Payment Processing Plan: Evaluate different Elavon payment processing plans to find the one that best suits the business’s needs and budget.
5. Educate Staff on Payment Processing: Ensure that staff members are knowledgeable about payment processing and can help customers with transactions efficiently.
By understanding the various components of Elavon service fees and implementing strategies to optimize payment processing costs, businesses can enhance their financial health and provide a seamless payment experience for their customers.
