There is no ecommerce merchant account that is designed especially for small businesses. Small businesses have to apply for the normal merchant accounts which the providers give with higher fees for small businesses. The ecommerce merchant account will attract high fees and stricter “terms and conditions” if you are the owner of a small business. The reason for this is your small business will not have a high turnover to bring in more profits for the provider. Therefore, the processing company will also not have more profits. Therefore, the fees and rates for merchant accounts for small businesses are higher.

The higher rates and fees are as follows:

  • Higher Discount Rate: These merchant accounts attract 6 – 12%, for each transaction.
  • Higher monthly fees, higher membership fee and higher setup fee.
  • And many others.

Then, the question arises: Why do small ecommerce businesses need this kind of an account? Processing of credit cards for online business is necessary because the online business cannot survive with out it. All the local banks and the regular account providers have a minimum monthly volume. It means that any registered merchant has to process a minimum amount of money to stay registered. If the minimum amount is not reached then your merchant account will be terminated or you will have to pay a fine. If the merchant account is terminated then the small business will get a red mark on their credit reports which they cannot afford at this stage.

The word small does not mean that the number or services or products available on your site is less and it also does not mean that the number of visitors is less. It only means that your processing volumes are very low. Ecommerce merchant accounts designed for small businesses have no policy on minimum volumes. This is the only advantage that you get with the merchant account.

You can also apply for the 3rd party merchant account. Such accounts will have no minimum processing volumes or they will have convenient processing policies. You will also not have to pay any membership fees. Due to these advantages, the 3rd Party Merchant accounts are available at much higher rates that the regular accounts.

Being a new ecommerce merchant you will have lots of expenses to build a good reputation, thereby allocating only a minor portion of your financial resources to credit card processing. Moreover, your online business will go no where without credit card processing. Therefore, for small businesses the best choice is either to obtain the “merchant account for small businesses” or to obtain a 3rd Party Merchant Account.

Which is a better choice? The answer depends entirely on you and your business requirements. You have to spend some time to analyze your ecommerce business needs and decide which one will best suit your business. Find out the advantages and disadvantages of each of these accounts in specific situations. Don’t take this decision in a hurry and repent it later. Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.