Evaluating Credit Card Processors and Their Fees

If you are starting or currently operating a business you are aware of the importance of accepting credit and debit cards. Nearly 80% of commerce today is done in a noncash form while online businesses are accepting credit and debit cards for over 90% of their business.

Where does someone start when looking to open a merchant account (credit card processing account)? There are hundreds of companies on the internet that currently provide these services in an unregulated industry. Companies such as Internet Merchant Accounts and High Risk Merchant Accounts are BBB members which provide retail and internet solutions.

One of the most confusing sections of merchant accounts are their fees. There are nearly 10 different fees plus the rates. The fees and rates are higher if you are accepting cards over the phone or on the internet. This is because there is a heightened risk of fraud. When applying for a merchant account there are several portions of the application that are related to your business. The first part will be what goods or services your business provides. This will follow by the length of ownership, your estimated monthly volume, your typical sales amount and estimated highest ticket amounts. Processors will also require a percentage broken down into how many transactions you process face to face or over the phone/internet.

The fees involved which merchant accounts consist of; transaction, ACH, Decline, Annual, Chargeback, Early Cancellation, Minimum Monthly Discount and Statement.

A transaction fee is a flat fee for each transaction. Usually $.20-$.30. ACH fees or batch fees are daily fees for everyday that you have processed cards. For example if you are open Monday- Friday and process cards everyday you are open, then you will be charged an ACH fee each day (Monday-Friday) which is usually $.25-$.30. If you are closed one day and process no cards then you will not have to worry about the ACH fee on that day. A decline fee is a fee that is charged (usually $.25) for every card that is declined. An annual fee is a fee that is charged yearly for service. A chargeback fee (usually $25) is a fee that ALL processors have. This states that if a customer is satisfied with a transaction they have the ability to chargeback the amount and the merchant will need to deal with the bank directly to try and receive the funds back. Early cancellation fees are just what they sound like, fees that must be paid if the merchant cancels the merchant agreement before the term of the contract is up (usually 36 months). The minimum monthly discount fee is a fee accessed for merchants that do not process the minimum set in the contract (usually $2,500). We suggest that you avoid any company charging an annual, early cancellation or minimum monthly fee.

The discount rate is the percentage that is charged on every transaction. The discount rate ranges from 1.75% for retail to 2.25% for internet merchants. If you business is considered “high risk” you can expect to pay 7.5-8.5%+. High risk companies would include; travel timeshare, adult, pharmacy and business opportunity companies.

Companies that are processing phone or internet transactions are required to use a secure gateway or virtual terminal. This terminal allows the user to login from any computer with an internet connection and charge, refund or authorize cards. You are also able to accept e-checks, search through all transactions and verify settlements.

The most important fragment of merchant accounts is that you need one! The fees may look extensive but by working with a reputable processor you can maximize your profits and minimize the headaches. Our company uses PowerPayServices.com for processing and they have an impressive client retention rate of over 98%! Whoever you might use please make sure they are part of the Better Business Bureau. Do your research and you will be satisfied down the road.

Credit Card Processors and Internet Merchant Accounts published by Charles K. Carillo. Charles K. Carillo writes a number of Credit Card articles. The writer concentrates on articles about Internet Merchant Accounts and High Risk Merchant Accounts.

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High Risk Credit Card Processing

Choosing the right merchant account

Setting up a profitable business is quite the challenge, and an even bigger challenge is figuring out a way to accept payments from people who are using different modes of payment. Not everyone who walks into your store or buys goods from your online store, would like to pay in cash or by just a visa credit card. The object is to offer as many payment methods as possible while maintaining a profitable margin for yourself. This is where choosing the right merchant account comes into play. No merchant account today is free from transaction fees, or additional fees for utilizing the service.

There are few parameters that will influence and aid your decision in choosing the right account. First things first, you should know the various types of merchant accounts that are available, there are in essence 3 basic types of merchant accounts, the first is a regular or basic merchant account, this account does not come with any special privileges and the charges involved are decided based on the volume of transactions carried out and the volume of business you are generating.

The second type is high end or what is popularly called a high risk merchant account, such accounts are useful for people who are in a designated 'high risk' business category, for examples online casinos etc. Such accounts are more exclusive as approval criteria are stringent. The final type and rarer are specialized merchant accounts that are created for a particular type of business or special transactions.

The next few questions are designed to help you make a easy decision as to what type of merchant account to choose:

What volume of your business will be dependent on credit cards and EPOS transactions?

If you plan to offer the credit card facility as an additional convenience or a majority of your customers pay by cash, then you will in all likely hood be provided with a regular merchant account, with fixed monthly charges, and a minimum monthly limit. So then what do you have to get a high risk merchant account? Well think more like Walmart, okay you don't have to be that big either, but you should have a very good case to apply for a high risk merchant account, preferably have a good credit history and decent standing in the market.

Is there no way I can get a high risk merchant account if I have poor credit history?

Once you have decided that you need a high risk merchant account, and if you were declined a high risk credit account, the next step is to usually carrying out overseas processing of transactions, in countries like St. Kitts etc. Also spread your merchant accounts across multiple locations and vendors, not only does this step increase your chances of getting a high risk merchant account, but it also ensures all your transactions are not dependant on a single merchant account.

Can I do all this on my own?

There are specialized companies that offer their services and drastically improve your chances of getting a high risk merchant account. If you are not confident maybe you can get in touch with these companies online and let their professional expertise aid you.
Features of a high risk merchant account A high risk merchant account is a specialised and a much desired merchant account. Such merchant accounts are usually reserved for businesses that handle a large volume of transaction, or carry out transactions with risks like charge back, cancellation and non-authorization involved. High risk merchant accounts have been in use for a long time now, and are usually with sites like online casinos, adult sites etc. Not just online sites, even organizations like wal-mart and other stores, who deal in millions of transactions every day have the option to use high risk merchant accounts. There are a couple of features that one should look for before one decides on a high risk merchant account. The features that are offered with most high risk merchant accounts, and have fast become industry norms for any high risk merchant account are mentioned below:

Jim Johnson the author of this article on adult merchant accounts. Find more information about credit card processing here.

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Applying For a Free Merchant Account (an Overview)

Benedict Bailey

If you want to accept credit cards but you can't get a merchant account, then a free merchant account is for you. What do you need to know about free merchant accounts? Here are the basics.

First off, a merchant account is an account with a bank that allows you to accept credit card payments. This means you can tell your customers to pay either in cash or use that little plastic card in their wallets. There are two kinds of merchant accounts for the two different kinds of transactions:

Card present transactions

Card present transactions means at the point of sale(POS), the credit card can be swiped on a physical terminal. Think Borders bookstore along El Paseo.

Card not present transactions

Card not present transactions means a credit card cannot be physically seen as well as swiped. Mail Order/Telephone(MOTO) merchants & Internet merchants fall under this category. There is no physical storefront or POS. Applicants of a free merchant account usually fall under Card not present transactions.

A free merchant account is obtained through a third party processor. The third party processor allows other merchants to share their own merchant account. Merchants who avail of a free merchant account are usually rejected first by banks or brokers, or are either start up businesses who don't have enough money to get their own merchant account yet.

Requirements of a free merchant account

Applications can be quick, or drag on for days depending on your responsiveness to the requirements ( & how quick your agent can arrange for a merchant account). Here are some items needed to apply for a free merchant account.

Accomplished Merchant Application & Agreement

A business checking account

Articles of Incorporation or Incorporation Documents

Valid Identification Papers ( e.g. Passport, Drivers License)

Business License

Voided Checks

Bank Letter with Beneficiary Name

Web site URL

Statement of your return policy

Fees of a free merchant account

Like banks & brokers, free merchant account providers charge merchant fees.

Discount rate (around 2-4% of transactions)

Transaction fees

Monthly processing fees

Other fees you might incur include one time application fee, AVS(address verification service fee), statement fees, return fees, reserve fees, & charge back fees.

Before you sign up, keep these things in mind

• Make sure you're getting a free merchant account from a reliable company. Scour the Internet for any good or bad reviews for that provider.
  
  
• Review your options. If it means going through several providers & reading each & every offer sheet, then so be it. Look at the charges & always read the fine print.
  
  
• Don't give your go signal (in fact, your signature) if they can't answer your questions. If they can't answer your questions now, how can you expect them to answer your questions down the road?
  
  

Just like any decision you have to make in life, reviewing your options, doing your homework, & carefully reading the offer sheet of your free merchant account provider can very well be worth all the time spent making that decision.

source:users.search-o-rama.com/

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