Merchant Account Service Cost

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.

• 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.

• Read your contract carefully; MerchantExpress.com^[1] lists other possible charges.

• MonsterSmallBusiness.com^[2] gives an overview of how to choose a merchant account provider.
• Check what sort of customer service is provided, and when. Be sure you understand all the costs and charges for a particular service.
• PayPal^[3] , WellsFargo.com^[4] and QuickBooks^[5] offer merchant accounts, and 100Best-Merchant-Accounts.com. gives a review of the service Costco offers its business members.

1.  www.merchantexpress.com/merchant-account-fees
2.  www.monstersmallbusiness.com/ecommerce-strategy/merchant-account-providers.asp
3.  /www.paypal.com/webapps/mpp/merchant
4.  /www.wellsfargo.com/biz/email_form/merchant
5.  www.quickbooksmerchantservice.com/

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