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Processing rates and fees
![*]() Just because you can't
get a free merchant service, doesn't mean that you have to
spend a lot of money to enjoy the benefits of a merchant account.
There are plenty of merchant service providers on the market
that will provide you with the same quality service at a low
cost. An Internet merchant account Setup and purchase costs
have drastically fallen over the years. However, processing
rates and fees for an Internet merchant account have pretty
much stayed the same. Also check range of discount rates and
transaction fees. Most places charge a monthly gateway fee
as well.
You might even find a company that doesn't charge a lot of
the typical monthly fees charged otherwise. Using a low cost
merchant service is the best way to go. Don't think you'll
be getting poor service just because you're spending less
money on a merchant account. Companies that charge a lot for
their services are just trying to extract more money out of
you.
The products and services you sell will determine the transaction
fees you can afford to pay. For instance, if your products
are small, inexpensive and sold in high volumes then it is
beneficial to choose a provider that offers low transaction
fees, which usually range between $0.20 and $0.70. Otherwise,
the fees will chew into your profits.
In many cases, the length of time you have been in business
will influence the number of transactions you have on your
site and the level of your transaction fees. For instance,
some banks require a minimum number of transactions per month.
If you do not meet this minimum, you could be required to
pay additional fees. Some banks will ask you to estimate the
number of transactions you expect on your site. If you are
a new business, estimate conservatively.
A number of merchant account providers offer integrated systems
(turnkey solutions) that include each of these components,
as do hosting companies and E-commerce solution providers,
which bundle merchant accounts and other services into their
packages. Merchant account providers that offer integrated
services can be expensive because in many cases they work
with agents who make their money through commissions. As a
result, costs are often 'marked-up' so the provider can make
an acceptable profit. On the positive side, working with a
merchant account provider that offers integrated services
means that each level of the transaction is compatible with
the other.
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