💳 Understanding Payment Processing Fees: What UAE Merchants Need to Know

Whether you're launching an online store, running a restaurant, or managing a retail outlet, understanding payment processing fees is essential to managing your costs and improving profitability.

Yet many merchants are unclear about how these fees work—and what they’re actually paying for. In this article, we break down the key components of payment fees and how merchants in the UAE can evaluate and negotiate better rates.

💡 What Are Payment Processing Fees?

Payment processing fees are charges that merchants pay to accept credit card, debit card, and digital wallet transactions. These fees are usually calculated as a percentage of each transaction, plus a fixed fee.

For example:
2.5% + AED 1.00 per transaction.

These fees are shared among three parties:

1. Card Issuer (the customer’s bank) – earns a portion known as the interchange fee.
2. Card Network (Visa, Mastercard, etc.) – takes a network fee.
3. Payment Processor / Acquirer (e.g. Telr, Geidea, Network International) – charges a markup for facilitating the payment.

🧾 Types of Fees to Know

Here are the most common fees you might see in your pricing agreement:

• Merchant Discount Rate (MDR)
  The total percentage taken per transaction (e.g. 2.5%). This includes interchange, network, and processor markup.
• Set-Up Fee
  A one-time fee for configuring your POS terminal or payment gateway.
• Monthly Maintenance Fee
  Some providers charge this for maintaining your account and software.
• Terminal Rental Fee (for POS merchants)
  Charged monthly for using the physical card machine.
• Integration or Development Fee
  For e-commerce merchants requiring custom gateway integrations.
• Chargeback Fee
  Applied when a customer disputes a transaction.

🔍 What Impacts Your Fee Structure?

Fees aren’t always fixed. Your rates can vary based on:

• Business Type / Industry
  High-risk sectors like crypto and gaming may attract higher fees.
• Sales Volume
  Higher monthly volumes often lead to better negotiated rates.
• Transaction Type
  Local card rates (within UAE) are usually lower than international card rates.
• Payment Method
  Some providers charge more for AMEX or international cards than for Visa/Mastercard.
• Settlement Time
  Faster settlements may carry a higher cost.

💬 How to Get the Best Deal

• Compare providers – Don’t just go with what your developer or bank suggests.
• Negotiate – Ask for lower rates, especially if you process high volumes.
• Know what you’re paying – Request a full fee breakdown and avoid hidden charges.
• Review regularly – Your business may become eligible for better rates over time.

🧭 How PaySelect Helps

At PaySelect, we simplify this process. Our platform allows you to:

• Compare real provider fees side by side.
• Use our “Take the Test” tool to get matched with the best-fit payment partners.
• Filter providers by fee structure, services, and onboarding speed.

We provide unbiased advice to help you avoid overpaying and choose a provider that meets your business needs—whether you're accepting payments online, in-store, or internationally.

Final Tip:
Low fees are important, but so is service quality, speed of settlement, and customer support. Always balance pricing with performance.

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