With thousands of merchant account providers looking for new customers, it can be very confusing to find the best deal for your company. There are several things that you will need to consider before you select a provider.
1. Does the provider charge a setup or application fee? Fees for some providers can top $500. Make sure that you understand just how much you will be required to pay up front before you apply for your merchant account. Not all companies require these fees, so it definitely pays to shop around. If you do select a provider that charges fees, see if they will agree to refund your money if your account is not approved.
2. How much does the equipment or payment gateway cost? If you plan on having a terminal at your location to process credit cards, you will need to either purchase or lease this equipment. Even electronic payment gateways require a one-time purchase or monthly fee. Again, these fees vary according to the providers, so check with several companies before making a decision. Learn more about How an Online Store Handles Credit Card Orders.
3. How much is the monthly service charge? This fee is in addition to any equipment or gateway rentals and costs and transaction fees. This fee usually ranges from $15 to $25 per month.
4. Will the merchant account provider give you a monthly statement of your transactions? You need to be able to track your processed transactions. Some providers may charge an additional fee for this service, but it will generally be worth it.
5. How much are the transaction percentage fees? Each merchant account provider will charge a percentage on every transaction you process. This percentage is set by card issuers, but some merchant account providers add to this percentage. Make sure you are aware of all of these percentages ahead of time.
6. How much is the per-transaction fee? In addition to the percentage, you will be charged a per-transaction fee. This fee is typically about .25 to .35 for each transaction.
7. Are there any hidden charges? Read through the merchant account agreement carefully before you sign it. Make sure you understand all of the fees, the chargeback policy, and other regulations. Read up on How to Choose the Right E-Commerce System.
8. How often does the company release your funds? The merchant account provider receives the money first, then disburses it to you. Some companies release these funds every two days, while some may take as long as two weeks. You should know how often you can expect to receive your funds.
BuyerZone.com offers a helpful online request form that can help match your business to a merchant account provider. No matter what, do your homework before you settle on a merchant account provider. Selecting the wrong provider can be a costly mistake.