Merchant accounts compare quite differently. There are a few key features that you will need to look for when doing merchant account comparisons. We'll discuss the main points to pay attention too when doing a merchant comparison.
Merchant Discount Rate - this is the fee as a percentage that is charged each time to the merchant on the total transaction price. These vary with each merchant provider. Merchant account providers usually have a base discount rate of approx 1.65% on up on credit card transactions (this is usually the bottom rate they are allowed to charge by ISOs). Then depending on the type of card the buyer uses - the rate can change. Rewards credit cards cost a lot more than debit cards and there are many different rates for different types. Merchant discount rates can be negotiated sometimes and can be dropped down with more volume.
Merchant Transaction Fee - this is the per transaction fee as a flat rate. These typically range from $0.15-$0.45 per transaction. This is charged on top of the merchant discount rate.
How do these calculate? Let's say you have a sale for $10. Your merchant discount rate is 2% and you have a $0.35 per transaction fee. You net would be $10.00-2%($0.20)-$0.35=$9.45.
Setup Fees - these are sometimes charged to get the merchant account activated. Sometimes there may be extra charges for American Express and Discover activation. The best merchant accounts charge no setup fees for any of this.
Application Fees - some merchant providers charge an application fee to review your business to see if you qualify for a merchant account. This is never charged by the top merchant service providers.
Programming Charges - if you have a retail store or business that utilizes a credit card processing machine it will need to be programmed for your new merchant account to accept credit cards. The top merchant account providers will not charge a programming fee. This saves up to $100 or more in some cases. If you have a shopping cart - this does not include re-programming of any software.
Merchant accounts help small businesses of all kinds - from a retailer of police gear to internet business like php hosting. If you're a small business owner and looking to accept credit cards in your business - make sure you do a thorough merchant account comparison.
