The credit card companies, meanwhile, pay GSA an industrial fee for every transaction. But the program also calls for vendors to pay up to 5 percent of the total purchase price to credit card companies for processing fees. This additional charge covers the non-payment or fraud risks inherent in electronic sales. While such a fee is the norm in the credit card industry, vendors say it does not make sense in the federal market. The fees need to be lowered.
Vendors negotiate their own contracts with banks to process credit card transactions.
If they are unhappy with the fees, they should shop around for a better rate. Five percent is an exorbitant rate. If they shop around they could get it down to 2 percent. The processing fees, which help offset the cost to credit card companies for agency refunds and GSA fees, were never intended for large purchases, said Chip Mather, senior vice president of Acquisition Solutions Inc., a federal procurement consulting company. The situation is made even worse by the other fees vendors already pay.