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Choosing a Merchant Account Provider
By: Mary Hedden, Tue Aug 15th, 2006
When looking for a merchant account provider, it is important to
do a lot of research. You do not want to pay too much or sign up
with a disreputable company. However, you do need to keep in
mind that once you do sign up it could take up to a week for
your application to be approved once it has been submitted.
There are three main factors that you should consider when
selecting a merchant account provider.
1. Price 2. Integrity 3. Customer Service
Price (Merchant Account Rates and Fees)
When shopping for a merchant account, it is important to
understand all of the rates and fees that the merchant account
provider charges.
You will typically be charged the following fees:
Monthly Fee - Normally around $25 US and could vary depending on
whether you meet your minimum monthly transactions.
Discount Rate- Percentage taken from a sale that the merchant
pays to cover the costs of the transactions and the risk
involved. Usually 1.5 percent to 3.5 percent.
Transaction Fee - A flat fee charged for each transaction.
Typically between $0.20 and $1.00 US per transaction.
Application Fee - The initial fee you are charged to open the
merchant account. Many merchant account providers do not charge
application fees.
Equipment and Installation - Software can range from $0 to $1200
US or more depending on whether you have batch or real-time
processing. Costs for hardware (POS terminals) can range from
$500 to $1,500+ depending on the model you purchase.
If you have current or projected sales data, you can forecast
what your fees will be for different merchant account providers.
Searchmerchants.com has done this for you with the top internet
merchant account providers in their database. If you visit
Searchmerchants.com, you may enter your monthly sales data to
compare fees for their recommended providers.
Integrity of the Merchant Account Provider
It is extremely important to consider the integrity of the
merchant account provider that you select. There are a number of
providers in the merchant account industry that cannot be
trusted.
Here is a list of some red flags to look for while shopping for
a merchant account.
1. The website of the company has misleading ads such as “Free
Merchant Account” or “Lowest Prices Guaranteed”. Research these
ads carefully to find out exactly what they mean.
2. You repeatedly get an answering machine every time you call.
3. They are using a free domain name or a free web hosting
service. (If they cannot afford a domain name, then they
probably should not be in the merchant account business.)
4. They do not answer your questions precisely.
5. They have rates and fees that are not posted on their
website.
Make sure you search the internet for reviews of the company and
for any unsatisfactory remarks.
Customer Service
Customer Service is key for smooth transaction processing. Try
calling their customer service number to ask them some
questions. Pay attention to the amount of time that you are on
hold. Make sure that have friendly representatives that are
knowledgeable and answer your questions precisely. They should
be genuinely interested in helping you.
Superior customer service should also have a toll free number
and provide 24/7 availability.
Although the integrity and the customer service are extremely
important when choosing a merchant account provider, don’t be
fooled into thinking that you should pay more for these
services. If you do your research and shop around, you should be
able to find a quality provider that does not charge high fees.
About the author:
Mary Hedden is the owner of http://www.searchmerchants.co
m - Searchmerchants.com is dedicated to helping you find a
merchant account provider so that your retail or internet
business can start accepting credit cards for less. Permission
is granted to reprint this article as long as no changes are
made and the resource box is included with a link to
http://www.searchmerchants.com
