Credit Card Processing

What is a POS WATS fee?


March 27, 2023

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.

Credit card processing statements are full of confusing acronyms and opaque fees. We can help you figure out what they are and how to lower your costs if your fees are adding up to an expensive processing solution.

What is a POS WATS Fee?

As mentioned above, the pos wats fee is a fee you’ll see each time the credit card equipment dials the processor’s toll-free 800 number to get or give information. Most processors hyphenate the term and write it in all capital letters on a merchant processing statement. (i.e., POS-WATS.)

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). While several processors refer to the communication fee as a wats fee, First Data (now Fiserv) uses POS-WATS. Being the largest processor in the United States, Fiserv provides processing services for a number of different companies.

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’ credit card processing fees. Basically, it’s a fee on top of other fees you’re paying.

WATS Fee in Practice

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.

Lowering Costs

If POS-WATS fees are causing your credit card processing costs to eat into your bottom line, you can secure lower cost processing by comparing rates and fees from processors.

Try CardFellow’s free, private quote comparison tool to get started finding the most competitive solution for your business.

Ben Dwyer

BY Ben Dwyer

Ben Dwyer began his career in the processing industry in 2003 on the sales floor for a Connecticut‐based processor. As he learned more about the inner‐workings of the industry, rampant unethical practices, and lack of assistance available to businesses, he cut ties with his employer and started a blog where he could post accurate information about credit card processing. As the blog gained in popularity, Ben began directly assisting merchants in their search for a processor. Ben believes in empowering businesses by providing access to fair, competitive pricing, accurate information, and continued support. His dedication to transparency and education has made CardFellow a staunch small business advocate in the credit card processing industry.

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  1. from Mike, on April 21, 2015

    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.

  2. from Ken Cohen, on December 29, 2015

    I was overcharged by Mastercard and am having trouble finding the right people to contact. This month there were 38 Mastercard transactions but I was charged for 72 pos-wats. While that is only $3+, it can obviously add up over time. My credit card processing company Cayan was no help, saying they are just passing through what Mastercard bills them. They could provide no contact info for Mastercard. Need some help here???

    • Hi Ken,
      Unfortunately we can’t really assist with that directly, but Cayan should definitely be able to tell you what’s going on. Maybe you could try calling back and speaking to a different rep? Your processor should always be willing and able to assist you, and if they aren’t (or can’t) it’s potentially worth reconsidering whether they’re the right fit for your business. I hope this helps!

      • from photog48, on December 31, 2015

        Thank you for your response. I spoke to Cayan and they said the extra pos-wats charges were for the batch headers. Cayan has a separate charge for the batch header fee – 31 for the month of November. Additional they are telling me that the MasterCard Pos-Wats fee – 71 times $.10 is made of 38 authorizations for credit card charges and another 31 for the batch headers. Doesn’t seem right to me, but Cayan was not interested in contacting MasterCard to get any more of an explanation. They say they are just ‘passing through’ the charges that are coming from MasterCard. They gave me a general telephone # for MasterCard for me to contact them.

        • I’m glad you were able to at least get some answers!

  3. from Tyler Alfriend, on July 13, 2016

    Hi, I just took over the books for a small store and have been reviewing our statements from our merchant account provider Elavon. Our most expensive fees are without a doubt our WAT fees. While Visa charged us a WAT fee on 836 out of 836 items sold, American Express only charged us a WAT fee on 42 out of 50 items purchased with AMEX cards. Why do some companies not charge a WAT fee on all items? I’m just trying to figure out how I can reduce this huge fee. Thank you!

    • Hi Tyler,
      WAT fees are one of those things that will vary a lot processor to processor. It sounds like it would be worth your time to check out what sort of pricing your store would be eligible for from other companies. You can check out CardFellow’s free quote comparison tool to see exactly what you could be paying. I hope this helps!

  4. from drew, on July 8, 2019

    If you are on I-Plus are you charged the discount fee on both the base rate of the qualified cards and the non qualified cards?

    • Hi Drew,
      Interchange plus doesn’t have “qualified” and “non-qualified” rates. Those are a component of tiered or bundled pricing. I hope this helps!
      – Ellen from CardFellow


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