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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