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FEES AND PROCESSING RATES
OF ONLINE MERCHANT ACCOUNTS
If you have come till
here then it is assumed that you have a
clear understanding of all the types of
merchant accounts and which is the best
suitable for your business. The first
question asked by any merchant when they
contact the service provider for the
first time is: What are the fees and
rates charged by you for the merchant
account? Then, you call another service
provider and fire him with the same
question. This is a good practice and
you should verify the fees and rates
with at least 5 service providers. Also,
you should surf the net also, to get the
best price for the merchant account. You
will definitely find an answer and for
that you need to see through the pages
regarding the pricing of all the account
providers. There are advertisements
saying that the rates are as low as
1.59% for online merchant accounts but
one thing you need to know is, this is
the business world and every body is out
there to make more money. So find out
how they are able to afford such low
rates before you get excited. Read
between the lines to see for any hidden
charges and other stuff. Also, read the
fine print very carefully. The company
that advertises a rate of 1.59% will
charge that rate only for debit cards
and it will be much higher for credit
cards. Also, many people don’t use their
debit cards to make payments.
The industry standard for
the processing rates of Online Merchant
Accounts should be around two percent.
The lowest rate is 2.15%. Also, ask your
account provider if the rates are same
for both credit and debit card
processing, else you will not be able to
take advantage.
Remember that the
processing fee for credit card payments
is just one of the many components that
will add to the cost of the merchant
account. However, this is the most
significant one. Also, most of the
account providers will charge different
rates for different credit cards.
Therefore, you need to know which kind
of credit card transactions that your
business will be doing the most. Some of
the rewards credit cards, commercial and
business – to - business cards attract a
much higher rate than the ordinary
credit card. Also, if you want to
process card-not-present transactions
without your card-present merchant
account then, it will cost you a lot as
the provider will put various surcharges
on such a transaction. If you want to
avoid the extra costs then choose the
right account.
Suppose your business
does significant amount of transactions
of both the card – present and the card
– not – present types then it is
advisable to have two merchant accounts,
one each for one type of transactions to
reduce your costs. The absence of
surcharges and other overhead costs will
save you more money than the cost of
paying for both the accounts. There are
many tools which can help you make the
right decision. |
