What does the term "charge per transaction" refer to?

The term "charge per transaction" specifically refers to the fee associated with the delivery of authorization during a transaction. This charge is typically incurred each time a payment is processed, encompassing costs related to the transaction's authorization, processing, and settlement in the payment system.

When a merchant processes a payment, the payment processor takes a percentage of the transaction value along with any fixed fees associated with that service. This is vital for businesses that accept card payments as it reflects the direct cost tied to processing each individual transaction.

Understanding this definition is crucial as it helps businesses gauge their expenses related to payment processing and allows them to assess the efficiency and cost-effectiveness of their payment processor arrangements. This knowledge is instrumental for financial decision-making and budgeting for businesses in a competitive market.