QB Issue Resolution:

merchant fees are a normal operating expense

 

the reasoning is that they are optional, the customer could pay in other ways

But if you want to , then use COS

Resolution for Issue 'Hi, could you tell me if Merchant Fees should come under Cost of Sales or Expenses? I’m thinking Cost of Sales but unsure?' available: Yes (Solved).
Source: Intuit Community forum.

Hi, could you tell me if Merchant Fees should come under Cost of Sales or Expenses? I’m thinking Cost of Sales but unsure?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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