|
INTERNET MERCHANT ACCOUNT PROVIDER
An account with a financial institution
or a bank which permits businessman to
take payments from customers through the
credit card mode via the net is known as
an Internet Merchant Account Provider.
The most important component of the
system is the Payment Gateway which
transmits the important information, to
process the credit card payment, to the
provider of the Internet Merchant
Account. However, most of the local
banks don’t offer the “Internet Merchant
Account” facility.
There are several reasons for financial
institutions and local banks not to
provide internet merchant accounts. One
important reason is that transactions
through the net are completely opposite
unlike the face – to – face transactions
that require the customer to sign the
receipt to approve a purchase.
Therefore, there is a high probability
of a credit card fraud in online
transactions. For this reason, while you
are deciding on the provider of a
merchant account you should give first
priority to fraud protection so that
both you and your customers will be
protected.
Since this facility requires more
complex technology the first question on
your mind would be: What is the cost of
this account? To comprehend the cost of
your provider can be difficult.
Typically, an internet or an online
merchant account will have some fixed
costs.
Most of the providers of the internet
merchant accounts charge a nominal fee
for the application. The purpose of this
fee is to cover the expenses for the
processing of the application. Suppose,
later you decide not to go ahead with
the plan of opening an “Internet
Merchant Account”, then you will not be
refunded with the fees. However, there
are few providers who do not charge this
fee and is highly recommended that you
choose an account provider who waives of
this application fee.
Most of the providers of internet
merchant accounts charge a “Statement
Fee” or a monthly fee. This is just
another way to cover expenses and make
money. It is highly difficult to find
good merchant account providers who
waive of this kind of fees.
Then, we have the discount rate, which
ranges from two to four percent. This is
really a sales commission which the
provider will earn on each sale. For
example, if the rate is three percent
and there is a sale of $10 on your
website, then you owe thirty cents to
your merchant account provider.
There is also a “Fixed Transaction Fee”
for each transaction that you make. It
ranges from $0.20 to $0.30. It is a
portion of each sale. Unlike the
discount rate, this fee is constant for
every sale you make, whether it is $5 or
$50.
Then, there is something called as the
termination fee which applies to you if
you want to terminate your merchant
account within a specific period that
ranges from a year to three years. If
your client requests you a refund, then
the provider will charge you another
fee.
Before choosing an Internet Merchant
Account Provider you should do enough
research to get yourself the best deal.
|
