MERCHANT ACCOUNT RATES

Merchant account rates are typically the fees associated with merchant accounts. These rates will vary between the different merchant account providers. Following is a few entities that sum up the merchant account rates:

-      Set-up/ Application fee – This is a one-time fee which is charged by almost all the merchant account providers. Some providers charge the application fee at the start while the others add this fee to the solution lease/purchase costs. However, a few providers do not collect the application fees at all.

-      Hardware/Software or Lease cost – An important point worth mentioning is that leases prove to be beneficial in come cases as a person does on need to pay up-front for terminals. However, it is a much better option to make a purchase in the beginning rather than paying the lease in the next few months. With leases, a trader might end up shelling out three or more times the actual cost. Once a lease is started, it is difficult coming out of it. The lease fee seen by the trader usually excludes the sales tax and the loss/damage waiver charges. A trader also has to keep in mind the clauses that permit the lease firm to charge even after 2 years have elapsed.

-      Programming – the programming charges are usually applicable to retail traders who change their provider from one to another. The process involved in programming is rather simple but one must keep an eye on the costs.

-      Discount Rate – This rate is the constant percentage amount that gets subtracted from the cost of purchase. Businesses out of the United States will pay higher discount rates which are close to 3 – 4%.

-      Transaction Fee – Apart from discount rate, transaction fees is also subtracted from the cost of purchase. This fee gets lower for businesses in the retail market and is slightly higher for Internet and MOTO establishments. The Address Verification cost is either incorporated in the transaction fee or is charged as additional fees. Non-US businesses will have to shell out higher transaction fees.

-      Monthly minimum – this fee is on the basis of the discount rate and transactions fees from the sales that take place through the credit cards each month.

-      Gateway Access – More often than not, the provider of a Secure Payment Gateway is a different firm from that of a merchant processor. Hence extra fees will be charged for gateway access.

-      Statement Fee – This fee is usually charged during the month end if a trader gets statements from the processing bank which lists the transactions that took place for that particular month.

-      Daily Close Out – This fee is associated with terminal and software processing solutions on a daily basis.

-      Address Verification System – this service is used to check whether the address given by a particular customer matches with the credit-card.

-      Annual Fee – some of the processors, such as banks, which process the credit cards, charge a fee for system upgrades and maintenance. This information can be obtained from a sales representative of a merchant account.