The Ins and Outs of Merchant Accounts

Written by Robert Levings


Continued from page 1

4. What Fees are Associated With a Merchant Account?

The fees that you will pay for a merchant account vary depending upon many ofrepparttar factors discussed earlier, such as perceived level of risk, estimated dollar volume,repparttar 108919 aggressiveness ofrepparttar 108920 acquiring bank, etc. In general, however,repparttar 108921 following rates will apply:

Setup Fee: sometimes called an “application fee”, this one time fee varies widely, from $0 to $500 depending uponrepparttar 108922 acquiring bank.

Discount Rate:repparttar 108923 discount rate isrepparttar 108924 percentage ofrepparttar 108925 total sale that you pay torepparttar 108926 acquiring bank. These rates are determined using a number of factors, includingrepparttar 108927 average order dollar amount, estimated total monthly dollar volume,repparttar 108928 perceived business risk, etc. Discount rates range from approximately 2% to 4%. Small variations in discount rate can have a large impact on your total cost if you are processing significant dollar volume.

Transaction Fee: some acquiring banks levy a transaction fee in addition torepparttar 108929 discount rate. Of those that do levy a fee, they typically range from $.10-$.30 per transaction. Note that banks that waiverepparttar 108930 transaction fee sometimes “build it in” torepparttar 108931 discount rate to make their fees appear more competitive. Comparingrepparttar 108932 total cost of different providers will allow you to make informed decisions by comparing “apples to apples”.

Statement Fee: this fee coversrepparttar 108933 cost of producing your monthly statement. Typical fees are $10 or under, although some banks will not charge a statement fee at all.

Monthly Minimum: some acquiring banks will charge you a minimum fee (e.g. $25) if your discount rate plus transaction fees do not exceed some minimum amount.

Chargeback Fee: if a customer successfully repudiates a charge from you,repparttar 108934 bank will charge you a “charge-back” fee. This rate varies from $10 to $25 for each chargeback. Note that too many charge-backs will likely result inrepparttar 108935 loss of your merchant account status, so be sure to take advantage of available fraud control technology and apply sound business judgment in order to reduce incidences of charge-backs.

Reserve Funds: ifrepparttar 108936 acquiring bank perceives that your level of risk exceeds their standard guidelines but is not high enough to result in a rejected application, you may be required to set up a reserve account withrepparttar 108937 bank. This typically consists of a percentage of your sales volume (e.g. 10% of your estimated first six month’s sales). This provides a fund thatrepparttar 108938 merchant account provider can access should you exitrepparttar 108939 business.

Because ofrepparttar 108940 number of fees involved, we recommend that you prepare a spreadsheet to calculaterepparttar 108941 total cost ofrepparttar 108942 various merchant account alternatives that you are exploring. This will help you make your final decision. EasyPay123 has a simple online fee calculator available on our website that helps simplifyrepparttar 108943 process of comparing different merchant account providers’ fees.

Merchant Account Tips

1. Determine what software you are going to use to process credit card payments before you get a merchant account. This will determine whether you will need a card present or card not present type of merchant account. 2. Be sure to shop around in order to getrepparttar 108944 best value from your merchant account provider. Remember that price should only be one factor in your selection process. Service, reputation and policies should be evaluated as well. 3. Ensure that your merchant account provider connects to a processor that your payment gateway also connects to. 4. Minimize your charge-backs by employingrepparttar 108945 latest fraud detection technology and exercising good business judgment before shipping products. 5. Be sure to calculate total costs when comparing merchant account providers. Often fees are “hidden” inrepparttar 108946 discount rate to make it appear that, for example, transaction fees or setup fees are being waived. Understandrepparttar 108947 various components that will determine your cost and take a few minutes to dorepparttar 108948 necessary calculations. It could save you a lot of money downrepparttar 108949 road. To speed up your comparison process, use EasyPay123’s merchant account fee calculation located on our site.

Summary

Obtaining a merchant account is a necessary step in providing your merchantsrepparttar 108950 convenience of paying by credit card. If you haven’t gone throughrepparttar 108951 process before, it can be somewhat confusing, since many players and fees are involved. Shop around, understand all ofrepparttar 108952 related fees and policies associated withrepparttar 108953 merchant account, and ensure that you’re dealing with a reputable company. Your business deserves nothing less. If you have any questions aboutrepparttar 108954 process, please call us at EasyPay123 toll-free at 866-438-8767.

About EasyPay123

EasyPay123 is a leading supplier of payment processing solutions to businesses across North America. Offering world-class solutions at affordable prices, EasyPay123 helps merchants simplifyrepparttar 108955 process of acquiring, launching and using payment applications to improverepparttar 108956 way they do business. Visit us at www.EasyPay123.com.

For a description of some ofrepparttar 108957 e-commerce terms used in this article, please visit our online glossary at www.EasyPay123.com.

If you found this article helpful, you may wish to request one or more ofrepparttar 108958 other articles inrepparttar 108959 EasyPay123 series by visiting our website. Articles in this series include:

Understanding E-commerce Transactions How Transactions are Processed Getting Merchant Accounts How to Design and Build Payment Applications How to Choose a Payment Gateway How to Pick a Shopping Cart Preventing Online Fraud Gaining Visibility for Your Website Understanding Wireless Payments

© 2003 EasyPay123 All Rights Reserved. This article may not be copied, reprinted, published, translated, hosted, or otherwise distributed by any means without explicit written permission from EasyPay123.



Robert Levings is President of EasyPay123, a leading North American provider of online payment solutions.


It's Already 10a.m. - Why Aren't I A Millionaire Yet??

Written by Dan Reinhold


Continued from page 1

So it's notrepparttar high life, but it IS my life.

Once you're online, everything screams instant and incredible success. Lately I've seen ads withrepparttar 108918 headline, "Retire in 12 to 18 months". All you need to do is cram an entire worklife into that time frame and then retire...torepparttar 108919 grave.

Get rich NOW...Make money NOW...Butrepparttar 108920 real question has to be: What do YOU want?

I'm sorry to say I'm not rich (sometimes sorrier than others), butrepparttar 108921 lifestyle I'm constantly developing more than makes up for it.

Besides, I can't retire in 18 months. I have a Boy Scout camping trip with my son penciled in.

With two boys, a dog, a cat, a wife and a household to keep together to boot, Dan Reinhold isrepparttar 108922 editor of WAHumor to hang on to his sanity by showing how insanerepparttar 108923 work-at-home community can be. Work at home? You deserve a laugh!

Subscribe at WAHumor-subscribe@topica.com Send something WAHumorous to WAHumor@yahoo.com Do both and enter our monthly drawing!



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