Search thousands of topics on CostHelper.com

BROWSE ALL TOPICS >> appliances babies & children  cars  consumer electronics health & personal care home & garden personal finance  pets  schools small business weddings
CostHelper > Small Business  > Merchant Account Service

Merchant Account Service Cost


How Much Does a Merchant Account Service Cost?

 
 average costMedium: $25-$35 a month plus percentage 
post E-mail post Post   Comments (1)

A merchant account is a special type of account that allows small businesses to process credit card payments from their customers, either in person, on the phone or online.

Typical costs:

  • Most services charge a monthly statement fee, which should be around $10 or less. If you don't have a high volume of credit card transactions, there's also a minimum fee, usually about $25 a month. So the least you will pay each month is the minimum plus the statement fee, or about $35.
  • A merchant account service earns a commission (called a discount rate) on every credit card transaction processed through it; usually 2 percent to 4 percent, though some advertise at 1.7 percent and others range up to 5 percent or more, especially for a new business with no track record or a poor credit history. If your discount rate is 3 percent, you'll pay 60 cents for every $20 credit card sale.
  • There's usually and additional per-transaction fee of 20-70 cents. Whether a credit card sale is $20, $200 or $2,000, the transaction fee remains the same. And if a customer wants a refund processed through their credit card, there's usually a chargeback fee of $10-$20.
  • If you make $2,000 from 40 monthly credit card sales with a 3 percent discount rate, a $10 statement fee, a 25 cent transaction fee and four refunds/chargebacks at $15 each, the charges would total $140, or 7 percent of your credit card income. Rates are usually higher for new, less established business or those with poor credit, and lower for established companies with good records.
  • For a retail store, restaurant or other business with face-to-face customer contact, you'll undoubtedly need a credit card terminal, which cost $120-$1,000 but are often included as part of a point of sales system along with a computer, cash drawer, and bar code scanner.
Related articles: Point of Sale System, Cash Register, e-Commerce Website

What should be included:
  • There are many ways to submit credit card transactions to your merchant account, either by phone, online or with a card-swiping terminal, which can be fixed in your retail store or wireless for mobile services such as taxis or selling at multiple venues such as trade shows or craft fairs. Customer support should be available in case there are problems processing payments.
  • Merchant services accounts are offered by specialized providers, independent sales organizations or financial institutions such as banks -- although most banks charge fairly high fees for small, home-based or online businesses. Web-based companies can also choose to have a third-party company process their credit card sales, usually for a higher fee and it may take longer before you receive your funds. With your own merchant account, you often get your money from a transaction in three days or less.
  • Some merchant accounts include the ability to process checks online.
Additional costs:
  • Read your contract carefully; MerchantExpress.com[1] lists other possible charges.
Shopping for a merchant account service:
  • MonsterSmallBusiness.com[2] gives an overview of how to choose a merchant account provider.
  • Make sure a provider has a good track record with the Better Business Bureau[3] . Check what sort of customer service is provided, and when. Be sure you understand all the costs and charges for a particular service.
  • PayPal[4] , WellsFargo.com[5] and QuickBooks[6] offer merchant accounts, and 100Best-Merchant-Accounts.com. gives a review of the service Costco offers its business members.
post E-mail post Post   Comments (1)
CostHelper News


3 Ways to Have the Government Pay You Back for Your Energy Efficient Upgrades
Any renovations or upgrades made to your home this year that included energy-efficient appliances could be eligible for some federal energy tax credits. But it's not just appliances. || Posted December 9 2013


7 Lesser-Known Discounts for the 50+ Crowd
As they age, members of the Baby Boomer generation don't like to admit that they're senior citizens, but they love getting discounts. It's kind of a quandary, because some of the best deals available are reduced prices for older folks. || Posted October 21 2013

‣ All CostHelper Blog Posts


What People Are Paying - Recent Comments
Compare to Get Best Pricing
Amount: $0.00 per month
Posted by: Mista411 in Yourtown, AL.Posted: July 22nd, 2014 09:07PM
The best way to get the best pricing for a merchant account is to ask an honest independent sales agent to do a free rate comparison of your current merchant statement. Email me at fredmojr at gmail dotcom for more information and honest opinions :-).
Was this post helpful to you?   yes     no Report prohibited or spam


 

Comment On Your Experience With a Merchant Account Service
 
Subject:  *
Amount Spent:  * per month
Bank: Transaction Fees: 
Percentage Fees:   
Comments: 
Purchased:  Year: 
City:  * State:  *
 
Information about you:
Email:  * Email addresses are not displayed.
Name:  This is the name we'll display with your post.
me on this computer
*=required field.
 



External Resources:
  1.  www.merchantexpress.com/merchant-account-fees
  2.  www.monstersmallbusiness.com/ecommerce-strategy/merchant-account-providers.asp
  3.  search.bbb.org/
  4.  /www.paypal.com/webapps/mpp/merchant
  5.  /www.wellsfargo.com/biz/email_form/merchant
  6.  www.quickbooksmerchantservice.com/
More Small Business Topics
Check Out All Costs for Small Business How Much Does Payroll Service Cost? How Much Does a Point of Sale System Cost? How Much Does a Bookkeeper Cost?

Search Thousands of Topics on CostHelper.com



Today's Featured Cost Articles

About CostHelper
CostHelper is based in Silicon Valley and provides consumers with unbiased price information about thousands of goods and services. Our writers are experienced journalists who adhere to our strict editorial ethics policy.

CostHelper Community
COST OF EXAM, EUTHANASIA & GROUP CREMATION
Paid: 160.00
Exam $48, Euthanasia of our Cat Grasshopper $84, Aftercare group cremation $28, total of $160. Location Southern California / San Diego County on 8/28/2014. Tried to take her to our Vet of 15 years and they could not see her for a week... [more]
-Crisy
Pet Euthanasia Cost
Yearly trust payment
Paid: 12000.00
I pay about $12,000 a year to my trustee's New Mexico office, However I've often wondered if I was being excessively charged... [more]
-paying more then earning
Trust Cost
ER w/belly ache
Paid: 9988.00
Went in & 2 other cases came in later but had 2 be served 1st. Gave me a pain killer & never saw a doctor. Each thing they did was hurry up & wait... [more]
-charles pace
Emergency Room Visit Cost
Bone graft injection
Paid: 7700.00
The dentist said I needed 7cc's of bone @ $1100 per cc. Is this a reasonable amount? This was to secure an implant the was infected... [more]
-Gala Dali
Dental Bone Graft Cost
wheel balance (front tires)
Paid: 38.00
They busted 1 of my wheel studs, didn't tell me, and replaced it with a really crappy looking lugnut. Oh, and the ride quality is worse. I paid them to do this... [more]
-Hue Janus
Wheel Balancing Cost
Deep cleaning and extractions
Paid: 90.00
When we got our 4-year baby from someone she had horrible breath and our vet recommended a deep cleaning for $175. I checked around and the SOHFGA did the same procedure for $80. So I had them do it at the same time we had her spayed... [more]
-Cocoa's Mom - Phyllis Rios
Dog Teeth Cleaning Cost