What is a POS WATS fee?

A pos wats or pos wat fee is a communication fee that is charged each time a business's credit card equipment dials the processor's toll-free 800 number to get or give information.

The acronym POS stands for point of sale, and the acronym WATS stands for wide-area telephone service. When taken together POS-WATS stands for point of sale wide-area telephone service (fee).

The term is almost always hyphenated and written in all capital letters on a merchant processing statement, such as POS-WATS.

The pos-wats fee is a credit card transaction fee that is often charged in addition to other transaction fees such as authorization fees, return fees, and AVS fees. This is what gives the pos-wats fee the potential to make quite an impact on a business's credit card processing fees.

For example, an interchange plus quote of 0.25% plus a $0.10 authorization fee looks pretty competitive at first glance. However, the processor can effectively double the transaction fee by burying a pos wats fee of $0.10 in the fine print.

Since the pos wats fee is charged each time the business's credit card machine calls the processor's toll-free 800 number, it will be assessed along with any additional transaction fees. In this case, the processor will charge $0.10 per transaction as an authorization fee and another $0.10 per transaction for the pos wats fee for a total of $0.20.

While several processors refer to the communication fee as a wats fee, the exact abbreviation POS-WATS is used by First Data. Being the largest processor in the United States, First Data provides processing services for a number of different companies.

Ipayment is a large merchant service provider that utilizes First Data's processing services and often charges a pos wats fee.

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2 Responses to What is a POS WATS fee?

  1. Mike says:

    Does the WATS fee apply to only dial-up only?
    Does the WATS fee apply to an internet connection?

    • Hi Mike,
      A POS WATS fee typically only applies to point-of-sale equipment that connects via a phone line. However, it’s important to note that processing fees are often proprietary, and there are no standards or regulation when it comes to how fees are named or labeled.

      Essentially, processors can call fees whatever they want. So, it is certainly possible for a processor to label something a “WATS” fee when it’s charged as a result of something different than a dial-up transaction fee.

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