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


Top 7 Ways to Trim Pet Expenses
Pets, for many, are part of the family; another member that needs love, feeding and treatment, just like anyone else in the household. || Posted September 18 2013


Forgotten Expenses In a Home Addition Budget
Items like construction costs, permit fees or debris removal aren't the only expenses to consider when calculating the total costs of a home remodeling project. || Posted August 5 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
Outrageous Expense
Paid: 79000.00
1 hour and 20 minute flight from a hospital who is in my plan to a hospital that is in my plan and both have medflight helicopters... [more]
-Youare KiddingMe
Air Ambulance Cost
Family friend's wedding
Paid: 710.00
1 bridal bouquet/1 toss bouquet, 2 MOH bouquets, 1 jr bride bouquet, 5 bride maids bouquets, 2 wrist corsages, 2 flower girl baskets, 1 ring bearer pillow and supplies for 19 centerpieces (11 tall pilsner vases with approximately 20 flowers... [more]
-Mrs. Murray
Wedding Flowers Cost
Ignition coil
Paid: 46.00
Bought at O'Riley auto parts. Watched YouTube video.Removed 2 screws it sits on top of engine. Replaced coil and bad spark plug... [more]
-James Smith01
Ignition Coil Replacement Cost
Concussion
Paid: 7459.00
Hit my head hard and had speech deficit and blurry/double vision. Urgent care advised I go to Emergency because they had MRI. I was able to understand what I was told, but really having difficulty finding words and talking... [more]
-KS
Emergency Room Visit Cost
Cat declawing just front know anywhere that isn't outrageously priced??
Paid: 0.00
Need to have my 2 yr old cat declawed. Unfortunately where I live they are now making it mandatory. My vet I currently use wants over $450. I really can't afford that. I'm currently dealing with medical issues myself and getting chemo etc... [more]
-Livey
Cat Declawing Cost
Pricing--alterations/custom
Paid: 0.00
I have to chuckle over the comments about pricing. Custom dresses should not cost less than ready to wear (unless you are buying the label/shop name). The things I try to remind brides of are: 1. I make your pattern for you alone... [more]
-smsivulabydesign
Wedding Dress Alterations Cost