What is a merchant authorisation fee?
A merchant authorisation fee is a charge applied each time a transaction request is sent to the issuing bank for approval. This applies whether the transaction is approved or declined.
Why are authorisation fees charged?
They cover the cost of sending transaction data through the payment network and receiving a response from the issuer.
When are authorisation fees incurred?
They are incurred during payment attempts, including initial transactions, retries, refunds, and voids where authorisation checks are required.
How do authorisation fees impact merchants?
High volumes of failed or repeated transactions can increase costs significantly, especially for businesses with retry logic or subscription billing.
How can merchants reduce authorisation fees?
They reduce unnecessary retries, improve payment success rates, and use smart routing or account updater services to minimise failed transactions.