Articles
Newsletter
| Ecommerce Merchant Account Guidelines |
 |
 |
 |
| Written by Brian Armstrong |
| Tuesday, 30 December 2008 11:43 |
|
For internet business owners, accepting credit cards is pretty much the only way to conduct business over the internet. The options are to go with a company like Paypal which has its drawbacks or to get a "real" credit card merchant account. Don't get me wrong, Paypal is a "real" merchant account in that you can accept any types of credit cards, but this is only after you sign up for their premium business service which ends up being more expensive than a typical merchant account. Pricing merchant accounts starts with the discount rate. Everybody always asks for this rate when comparing merchant accounts. For internet based transactions, the discount rate will typically be about 2.1 to 2.5%. Paypal is a merchant account provider that charges a flat rate of about 3%. Even though this may seem to be easier to reconcile, it will ultimately cost most merchants more money simply because 80% or more of your transactions should go through at that lower qualified rate. A non-qualified or mid-qualified rate will usually add on an additional .5% to 1.5% for these transactions that are "downgraded" because they are either a rewards card which cost more to process or a government or business credit card. Both merchant accounts and Paypal charge a per transaction fee. This is usually about $.20 to $.30 for each transaction. Merchant accounts add on an additional $.05 usually for what's called an AVS fee. Even with that $.05 for AVS, most merchant account per transactions can get to be as low as $.25 or less. Batch header fees would probably considered by most merchants one of those "hidden" fees. This is a fee that most merchant don't ask about and unless they look closely, don't know about and never question. These batch header fees may be as much as $100 per year or so depending on how often the merchant processes credit cards. What happens is that transactions are batched together usually daily and submitted. Each one of these batches are assessed a batch header fee of about $.25. So, for an easy way to calculate this, if you process transactions every day, you'll be paying $.25 per day. So, even on your busiest month, this fee wouldn't exceed $8 per month. Monthly fees for a traditional merchant account are usually around $20 or less. For a statement fee or account maintenance fee expect to pay about $10 and for an internet gateway, such as Authorize.Net, you'll probably be paying an extra $10 as well. Work with your merchant account provider to waive the monthly minimum, especially if you're an internet business processing less than $1000 per month in gross volume. Processing transactions through the internet also implies that you'll have additional fees involved. This is usually through what's called a gateway which is a company or software that will facilitate getting the transaction information from your customer to the bank for processing and is done online. Authorize.net is probably one of the more popular gateways that you've heard of. There are a lot more, but only a handful that are compatible with just about every shopping cart solution out there. If you do decide on Authorize.net, plan on a setup fee of about $100 or so. There are plenty of companies that give this setup away for free, but most of them also charge more on the monthly or will charge you the equivalent in an annual fee. Getting setup with an internet credit card merchant account isn't too difficult and should be considered vital to any internet or ecommerce project. This can be done usually about 1-2 weeks before going live which will give you plenty of time to get your account approved (usually 2-3 days at most) and another week or so of testing. You should be able to get this setup without many problems at all. About the Author: Brian Armstrong is an internet merchant account executive. His focus is on helping internet business owners get setup with their credit card merchant account. This specialization in ecommerce merchant account setups is because Brian is also an internet business owner that knows what it's like to setup an internet business and run that business. Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
Stumble It!
Members : 1254
Content : 2297
Web Links : 1
Content View Hits : 309668
Content : 2297
Web Links : 1
Content View Hits : 309668