Merchant Account Fees

With all the money that’s being thrown around online, an important question for someone starting out in eCommerce is, How can I accept credit cards online? It’s a tricky question, especially considering how many credit card processing companies there are. In this article, we’ll discuss the basic terminology of merchant accounts and outline what fees you can expect.

First, let’s follow what happens when you use a credit card on a website.

In order to complete a sale, your website must use a payment gateway. The payment gateway gathers up all the information necessary to process the card, encrypts the data and sends it to the issuing bank.

Next, the bank verifies that there is enough money to cover the transaction, and tells the gateway whether the transaction is approved or declined.

The gateway then completes the transaction accordingly. The internet merchant account then transfers the money into the your business bank account (generally 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.

There are fees associated with every merchant account. In general, most reputable companies will waive the Set-Up Fee, but this still leaves you with a few other fees.

One of these fees the Transaction Fee, which varies from about 25 to 30 cents and is charged with every transaction, regardless of the amount of the transaction.

The next fee is a Minimum Monthly Processing Fee. This is the minimum monthly amount you are required to pay to the credit card company. For example, let’s say you have a $30 Minimum Monthly Processing Fee, but one month you only generate enough sales for $20 in fees. Since your minimum fee is $30, you would be required to pay an additional $10 to make up the difference.

Next up is the Discount Rate, which is usually 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 make a $20 sale, you will owe $1 to your internet merchant provider.

START ACCEPTING CREDIT CARDS TODAY! Fill out the simple form to the above right or call 1-877-305-4943 to start accepting credit cards today with MerchantAccount.com.