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How To Find the Best Merchant Account For Your Business
What a great idea! Start accepting credit cards and watch your profits soar. Nothing could be simpler. Or so you thought until you began researching merchant accounts. It can all get extremely confusing. There is an easy way to find the best deal that suits your business. You'll be able to compare apples to apples and have a clear picture of what the merchant account will cost you. Let's take a look at some of the phrases you'll encounter (in layman's terms) when you begin to search for a merchant account. --- Merchant Account Provider - The company who arranges for your payment hardware or software and your ability to accept credit cards. --- Nova - The company who processes the credit card transactions and forwards them to the appropriate credit card company for payment (Visa, MasterCard, American Express, etc.) --- Set Up Fee - The one-time amount the merchant account provider charges to set up your company in their system. For this example, we'll use a set up fee of $65.00. --- Discount Fee -One amount (there are others) that Nova and the merchant account provider deduct from each sale as a portion of their payment for your merchant account. We'll use a discount fee of 2.25%. --- Per Transaction Fee - This is a second amount that the two companies subtract from each transaction as a portion of their payment. For our example, we'll pick a per transaction fee of $.35. --- Terminal or Gateway Fee - Whether you have a real terminal or a virtual gateway via the Internet, you will be assessed monthly charges to cover the use of that service. Let's say $10.00 for our example. --- Statement Fee - The fee for your merchant account provider to send an itemized statement each month. An average amount we can use is $15.00. --- Annual Fee - An annual fee just for having your merchant account. For the annual fee example, we'll choose $35.00. I know what you're thinking! But don't give up before you start. Remember, I'm going to show you a way to decipher all this information. Choose a number -- any number. This will be the total number of transactions you think you might conduct during the course of a year. For our example, we'll use 100. Next, choose an average transaction amount for your product or services. We'll say $175.00 for now. Finally, we'll calculate a year's worth of charges by using the amounts above and within the definitions. Set Rate Charges: Set up Fee = $65.00 (one time only) Gateway Fee = $10.00/mth Statement Fee = $15.00/mth Annual Fee = $25.00/yr Then multiply your estimated number of transactions by the $ .35 per transaction fee. That equals $35.00. Next, multiply the average transaction amount ($175) by the discount rate of 2.25%. That equals $3.94. You've estimated that you'll have 100 transactions per year, so again, multiply the $3.94 by the 100 transactions. The total equals $394.00. All that is left is to add them all up. Set up Fee = $65.00 (one time only) Gateway Fee = $10.00 x 12 months = $120.00/yr Statement Fee = $15.00 x 12 months = $180.00/yr Annual Fee = $25.00/yr Per Transaction Fees = $35.00/yr Discount Rate Fees = $394.00/yr Total Fees & Charges For One Year = $819.00 Let's look at one other quick example just to show you that looks can be deceiving. This company offers the following rates: Set up Fee = FREE Gateway Fee = $15.00/mth Statement Fee = $10.00/mth Annual Fee = FREE Per Transaction Fees $ .30 Discount Rate Fees = 2.35% Software Lease = $24.95/mth Based on our same $175 average transaction and 100 transactions per year, we come out with the following figures: Set up Fee = FREE Gateway Fee = $15.00 x 12 = $180.00 Statement Fee = $10.00 x 12 = $120.00 Annual Fee = FREE Per Transaction Fees (100 transactions x $ .30 = $30.00) Discount Rate Fees = $175 avg. transaction x 2.35% = $4.11 x 100 transactions = $411.00) Software Lease = $24.95 x 12 = $299.40(an additional fee our first provider didn't charge) Total Fees & Charges For One Year = $1040.40. Even with free set up and no annual fee, this company still charges over $200 per year more than the first merchant account provider we previewed. Be very careful - the word "free" can often times be deceiving. Merchant accounts can open a world of new business for your company. They can provide a very convenient way for your clients to pay - and for YOU to get your money. However, when you shop for a merchant account, be sure to use a standard unit of measure like we've outlined above to be very sure that you are getting the deal best suited for your company. Diane C. Hughes * ProBizTips.com FREE Report: Amazingly Simple (Yet Super Powerful)Ways To Skyrocket Your Sales And Build Your BusinessInto A Tower of Profits! ==>> http://madmarketer.com/diane
MORE RESOURCES: Apple Valley Approves 2.6 Million Sq. Ft. eCommerce Project Along 15 Freeway, Council Vote Ahead Victor Valley News Shopify Among Fastest Growing E-Commerce Leaders: Check Out Names Just Added To IBD 50, Stock Spotlight List, More Investor's Business Daily Is WordPress The Right Choice For eCommerce Websites? Search Engine Journal Tariffs tilt the scales: US e-commerce sellers poised for margin gains amid trade tensions FreightWaves Interview: Ecommerce lessons from growing Norsland Lefse Digital Commerce 360 US Pressures India To Open Its $125 Billion E-commerce Market To Amazon, Walmart: Report Yahoo Finance K-ecommerce: Interview With Partner Channel Manager Rich Fowler About The Web Store Platform Pulse 2.0 Latest B2B Ecommerce news, research and case studies Digital Commerce 360 From Model to Menswear Founder Practical Ecommerce US presses India for full e-commerce access to Amazon, Walmart amid trade deal talks: Report Times of India Best ecommerce hosting of 2025 TechRadar How will you buy your Heineken in 2030? BeverageDaily.com Ecommerce earnings recap: What you missed from Movado Digital Commerce 360 New Ecommerce Tools: April 24, 2025 Practical Ecommerce Ecommerce Trends: 5 shifts happening because of new tariffs and trade rules Digital Commerce 360 BigCommerce's New Enterprise Partnership Promises Seamless Site Performance for Major Retailers Stock Titan New ecommerce rules spur cost-benefit debate in Turkey Arabian Gulf Business Insight | AGBI Amazon signals major shifts for B2B ecommerce Digital Commerce 360 U.S. pushes India for full ecommerce market access for trade deal - report (AMZN:NASDAQ) Seeking Alpha H-E-B opens eCommerce fulfillment center in Houston H-E-B Newsroom Albertsons integrates shoppable video ads into e-commerce site Chain Store Age EU warns shoppers to avoid cheap cosmetics from ecommerce sites Cosmetics Design Europe Tariffs, Temu, and Shein: What Supply Chain Leaders Can Learn from the U.S. / China ECommerce Shakeup Logistics Viewpoints - North America, Western Europe Spell Opportunity For E-Commerce Brands Looking to Expand in 2025 Sourcing Journal Section 230: Implications for Digital Platforms, Online Businesses and E-Commerce Crowell & Moring LLP Bringg’s Dynamic Delivery Slots to Offer Precise E-Commerce Delivery Windows Supply & Demand Chain Executive India under tariff pressure to give Amazon and Walmart’s Flipkart full market access Financial Times US ecommerce sales in 2024 more than double those of 2019 Digital Commerce 360 Distribution of the e-commerce market in Latin America and the Caribbean in 2025, by country Statista US ecommerce penetration nearly a quarter of all Q4 retail sales Digital Commerce 360 US to push India for greater ecommerce market access Libyan Express Cloud Retail raises £2.4m following pivot from Jiffy businesscloud.co.uk Topic: E-commerce worldwide Statista CAIT Calls For Levying Luxury Tax On Ecommerce Purchases StartupNews.fyi LOT Cargo successfully automates US ACAS pre-load filing with CHAMP’s Traxon global eCommerce caasint.com China’s top ecommerce firms retreat from refund-only policy StartupNews.fyi Ecommerce Stocks To Follow Now - April 22nd MarketBeat 79+ Brand New E-Commerce Statistics for 2025 Exploding Topics Retail eCommerce Platform Market Is Booming So Rapidly | Shopify, WooCommerce, BigCommerce openPR.com As US slams door, can the rest of the world offer Chinese ecommerce a lifeline? | Opinions Campaign Asia Kroger goes all in on ecommerce Supermarket News Top 13 Ecommerce Trends (2024 & 2025) Exploding Topics Lighting-centric e-commerce brand debuts Home Accents Today New Metapack® Survey: How Consumer Expectations are Reshaping Ecommerce After a Quarter Century of Retail Transformation Business Wire Trade bodies decry ‘unregulated’ and ‘unethical’ practices of ecommerce and quick commerce companies The Economic Times 5 Trends Influencing the Future of Ecommerce Entrepreneur How Pattern PXM’s Content Brief is driving conversion on ecommerce marketplaces using AI Amazon Web Services US Presses India to Open $125 Bn Ecommerce Market to Amazon, Walmart outlookbusiness.com |
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