POS Merchant Account: Daily vs. Monthly Fee Deduction

Transactions on your pizza or frozen yogurt point of sale (POS) systems come in several forms including, cash, checks, gift cards, loyalty card redemption, and credit cards. The fees that are charged for credit card transactions overwhelmingly include charges by Visa/MC, the issuing banks, regulatory agencies, government mandated fees, and to a much lesser degree your processor.
Pizza-Point-of-Sale-POS-Software-www.SintelSystems.comMerchant account fees can be deducted in two general ways including daily discounts or monthly. The latter is typically debited from the bank account within a week of the end of the month.  Having the POS merchant account fees deducted monthly is the preferred method since it allows the reconciliation of daily POS transactions with bank deposits. The daily method consists of 1) a small daily deduction from the daily deposits and 2) a monthly deduction for the remaining fees. The reason is that given the fact that fees are most commonly “card specific,” it takes time for processors to fully understand the fees as the charges are communicated back to the processors over time. So, the processors do not have an accurate account of the fees all the other parties involved will charge and therefore can only deduct a small portion on a daily basis. This is another testament that the merchant account providers control a very small fraction of the total fees.
Related Article: 5 Reasons POS Sales Reports & Merchant Account Statements Don’t Match
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