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Costs involved in setting up an Instant Credit Card Merchant
Account
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Instant Credit Card
Merchant account can be
setup in minutes to accept credit card payments. The various
fees and costs in setting up an account are as follows:
- Setup and Hardware Cost: Usually it starts from $100.
The hardware is also available on Lease, but that is not
recommended. It is always better for a merchant to make
an outright purchase.
- Transaction Fee: Are anywhere between $0.25 and $0.50
per transaction. Transaction fees will also vary according
to nature of your business. They are lower for retail
establishments compared to online or mail order based
businesses.
- Discount Rate: Are usually around 1.50% for retail businesses
while they are pegged around 4% for internet based businesses.
- Chargeback- A chargeback happens when the cardholder
claims the amount back that he has already paid or the
amount that has been fraudulently added to their card.
Chargeback rates vary; they can be $5 or $20 for a chargeback
occurrence.
- Annual Fees: This fee purely depends on your merchant
account provider. Some providers waive this fee completely,
while others may charge up to $100 a year. One must always
find this cost out from the provider before signing up.
- Gateway Fee: Secure payment gateway providers charge
a monthly fee for using their system. The fees usually
start from $10 a month.
- Address Verification Fees (AVS): The system checks the
billing address of the customer to the address on his
credit card. Most credit card merchant accounts come with
AVS at no extra costs. AVS charges are usually around
0.20% to 1.20% of sales
Look out for the above- mentioned rates and also hidden charges
that come with an instant credit card merchant account. These
charges however may not be explicitly communicated to you
and may be hidden.
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