A unique number assigned to each POS terminal, Virtual Terminal, or Gateway.

A third-party vendor that enhances or modifies existing hardware or software, adding value to the services provided by the processor or acquirer, e.g., a payment gateway.

A document given to a gateway that provides merchant account information, bank account information, processor information, etc., to aid in setting up communication between the gateway and the merchant account provider.

This is a fee that credit card processors add to accounts. However, to be clear, this fee is not a bonafide fee recognized by the processing networks, nor is it charged to all merchants or by all credit card processors. It would appear to be an extra profit center for the credit card processors. By adding these types of fees, the processor can offer a lower discount rate while still maintaining high-profit margins. In the example below, the merchant thinks they are paying a .15% “Discount Rate.” However, when you add back in the “Interchange Clearing Fee,” the merchant is paying .50% which is over ten times what the merchant should be paying. To be clear, this is just one example, and when you ask the processor to remove it, they will add a different fee to take its place.

An ISO (Independent Sales Organization) is a third-party entity that resells merchant processing services. ISOs are required to disclose their affiliation at the bottom of their website. For example, “ABC Processing is a registered ISO/MSP of Any Bank, Cincinnati, OH.”



The one who issues the Credit Card, which is Bank of America in the example below. 

In order to be competitive and offer lower discount rates, credit card processors can get creative and charge fees that are unique to them. This gives the merchant a false perception of what they are truly paying.

Below, the merchant has a .15% discount rate, which is about three times more than they should be paying. However, the credit card processor has added an “Interchange Clearing Fee” for .0035 (.35%), taking the actual rate the merchant is paying to .50%, which is over ten times what they should be paying.

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