With all the money that’s being thrown around
online, an important question for someone starting
out in e-commerce is, “Who can I get to accept
credit cards online for me?” It’s a tricky
question, especially considering how many
companies there are out there. That’s why, in this
article, we’ll discuss the basic terminology of
merchant accounts and the basic fees you can
expect.
First, let’s follow what happens when you use a
credit card on a website.
After you make the transaction, the website uses a
payment gateway. The payment gateway basically
gathers up all the information necessary to
process the card, encrypts the information, and
sends that information to Visa or Mastercard, or
whatever type of card it is.
Next, the card company verifies that there is
enough credit to complete the transaction, and
tells the gateway that the transaction is good to
go.
Then, the gateway tells whatever internet merchant
account you have chosen that it is okay to
complete the transaction. The internet merchant
account then transfers the money into the
merchant’s account, which generally happens within
two business days.
So, the key parts that you, as a merchant, have to
worry about are your internet merchant account and
your payment gateway. Since most internet merchant
accounts come with a payment gateway, that
basically means you only have to worry about the
account.
Associated with that merchant account are fees. In
general, most reputable companies will waive a
Setup Fee, but this still leaves you with a few
other fees.
One of these fees is a Per Transaction Fee. This
can vary from about 25 to 30 cents, and it is just
like it sounds: A fee that gets charged with every
transaction made, regardless of the amount of the
transaction.
The next fee is a Minimum Monthly Processing Fee.
The monthly processing minimum is the minimum
monthly fee you must pay to the credit card
company. For example, let’s say you have a $30
Minimum Monthly Processing Fee. Let’s say that,
one month, you make $1000 worth of sales.
Normally, this would only mean $20 in fees for
you. However, since your minimum fee is $30, the
company will round your fee up to $30.
Next up is the Discount Rate. Usually, the
discount rate will be between 2 and 4 percent. The
discount rate is the sales commission the provider
earns on each sale. For example, if the discount
rate offered is 5%, and you receive a sale over
your web site for $20, you will owe $1 to your
internet merchant provider.
So, with so many different parts and fees to keep
track of, and so many different balls in the air,
how can you make sure that you are choosing the
best credit card processing solution for your
business?
It’s a lot easier than you would think. Choose
merchantaccount.com! You can contact us at
1-800-956-1990 for more information. Make the easy
choice. Choose merchantaccount.com for all your
online credit card processing needs! |
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