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What Is an MSA?

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Understanding the Merchant Services Agreement (MSA)

When you sign up to accept credit card payments, you enter into a Merchant Services Agreement (MSA) with a processing bank, also known as a merchant acquiring bank. This agreement outlines the terms, responsibilities, and fees associated with processing credit and debit card transactions.

The MSA is a legally binding contract that governs your relationship with the financial institution that enables your card payment acceptance. It’s important to review this document carefully to understand the full scope of services, expectations, and charges involved.

What the Processing Bank Does

The processing bank plays a critical role in the payment ecosystem. They:

  • Authorize and settle your credit card transactions
  • Transfer funds from cardholders to your merchant account
  • Assume financial risk on your behalf by funding your transactions before receiving payment from card networks
  • Help ensure compliance with regulations and card network rules (i.e. Visa, Mastercard)

What’s Included in an MSA?

While the content may vary slightly depending on the provider or payment processor, an MSA typically includes:

  • Processing rates
  • Terms of service
  • Transaction processing rules
  • Payout schedules
  • Reserve requirements (if applicable)
  • Termination clauses
  • Fee schedules
  • PCI compliance responsibilities

Common Fees Listed in an MSA

In addition to standard processing fees (such as per-transaction rates or percentage-based charges), your MSA may list additional fees associated with managing your merchant account. These fees are common and may include:

  1. PCI Compliance Fee
    • A monthly or annual fee related to Payment Card Industry Data Security Standard (PCI DSS) requirements. This covers services or tools provided to help your business stay compliant with industry security standards.
  1. Batch Fee
    • A small fee charged each time your daily transactions are submitted (or “batched”) for settlement. Typically charged per batch, not per transaction.
    • Example: If you submit one batch per day, you might pay $0.10 to $0.25 per day in batch fees.
  1. Monthly Minimum Fee
    • If your monthly transaction fees don’t meet a minimum threshold, you may be charged the difference.
    • Example: If your monthly minimum is $25 and you only generate $15 in fees, you’ll be charged an additional $10.
  1. Statement or Account Fee
    • A recurring fee for account maintenance, reporting, or monthly statements.
  1. Chargeback or Retrieval Fee
    • Charged when a customer disputes a charge or requests information about a transaction. This covers the cost of the dispute process.
  1. Early Termination Fee (ETF)
    • If the MSA has a term length (i.e. 2 or 3 years), canceling early may trigger a fee.

Why It Matters to You

Understanding your MSA helps you:

  • Avoid surprise fees
  • Stay compliant with security requirements
  • Budget more accurately
  • Know your rights and responsibilities as a merchant

What Should You Do?

  • Read your MSA carefully before signing
  • Request a complete fee schedule from your provider
  • Ask whether PCI support is included or separately billed
  • Monitor monthly statements for any unexpected charges

If you have questions about your MSA or any listed fees, our support team is here to help.

06.23.2025