You know the importance of accepting credit cards in your business in today’s economy: by offering credit cards as an option to your customers, you can increase sales, grow your customer base, expand your company, and vastly improve your bottom line. But you’re concerned the cost of a merchant account may be too steep for your business. Or maybe you looked at merchant account services a few years ago and found the numerous costs and fees associated with them too confusing, their application process too protracted, or their contract terms too restrictive. In either case †whether you’ve explored account options in the past or not †you owe it to the future of your business to check out what today’s merchant accounts can offer you. In just the last few years, more and more account providers have entered the marketplace, and that means competition among providers has seriously heated up. What does that mean for you as a business owner? Reduced fees, less restrictive terms, and a much simpler application process. In fact, today’s merchant accounts are so different from those of even a couple of years ago, to borrow from an old catch phrase, if you haven’t looked at merchant account providers recently; you haven’t looked at merchant account providers. Many account fees have been entirely eliminated in the rush to attract new account holders. When considering an account today, carefully considering the fees charged by each account provider can pay off †literally. To help make the selection of your ideal account a little easier, the following guidelines will help you identify the fees you might encounter, and help you understand what those fees entail. It also identifies some of the fees that may have been eliminated by larger account providers. Application Fee As the name implies, this fee is charged to cover the costs of processing your application, and in some cases, pulling your credit report. Some merchant account providers have eliminated the application fee. Account Setup Fee This one-time fee covers the cost of establishing your account and setting up any software or equipment you may need. Once again, some account providers have done away with the setup fee, while others incorporate it into their overall monthly or annual fee. Equipment Fees If you choose to lease your equipment, this fee will cover those costs. Be aware: in many cases, it’s cheaper in the long run to purchase equipment, so look for an account provider that sells its equipment, in addition to leasing it, for the greatest flexibility. For some online processing systems, this fee may also include the cost of software needed to process credit card transactions. Discount Rates The discount rate is a percentage of each transaction and may vary based on the type of account you have (for instance, a retail account or an Internet account). The discount rate (sometimes called a discount fee) covers the cost of processing each credit card transaction. Transaction Fees Just like the discount fee, the transaction fee is charged with each transaction and can vary based on the type of account you have, with online accounts generally having the highest fees. This fee is a set fee (unlike the discount fee, which can vary by the amount of the transaction) and is basically the cost of doing business with a merchant account provider. Gateway or Weblink Service Online accounts that operate in a real-time environment will need a gateway (also called a weblink by some companies) to verify card information and authorize transactions in real-time †that is, as they occur. In addition to keeping the online transaction process moving smoothly and preventing errors, the primary purpose of the gateway application is to help reduce the incidence of fraud that may occur with online transactions. Depending upon the merchant provider, your gateway services may be included in your account services package, or you may need to choose a gateway provider on your own. In the latter case, check with your merchant account provider to be certain the software used by your gateway provider will work in tandem with the software used by the merchant account provider. If provided by your merchant account, any fees associated with the gateway will usually appear on your monthly statement. If you choose your own service, they may bill separately or in conjunction with your merchant account provider. Monthly Minimum Charge To keep their own businesses productive, merchant account providers depend on your business doing a certain established amount of business per month. During the account setup process, you’ll be asked to determine how many charges you expect. If your business does not have that many charges in a given month, this fee will be assessed to make up any difference. Understanding some of the most common fees charged by today’s merchant account providers can make the search process an easier task to undertake. But there is a caveat: Just because an account provider has lower fees doesn’t mean it’s the best solution for you. So shop around and compare before making any merchant account decision.
Please Rate this Article 5 out of 54 out of 53 out of 52 out of 51 out of 5
Not yet Rated
