merchant fee
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- How to read in Japanese: merchant fee
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Merchant fees are fees paid to credit card companies by merchants who sign a contract with a credit card company to install credit card payment systems.
Credit card merchants pay merchant fees to credit card companies, calculated by multiplying the amount spent by the customer’s credit card by a commission rate specified in the contract.
Merchant fees are a credit transaction in which the credit card company makes advance payments to the merchant. Therefore, commission rates generally vary depending on the merchant’s industry, with higher rates for industries with high collection risk and lower rates for industries with low gross margins.
The merchant’s sales may appear to be reduced by the amount of the fee. However, the merchant is prevented from losing sales opportunities to customers who wish to use their credit cards.