When you apply for a merchant account for your business, it is important to know the fees that are involved with credit card processing. Getting approved for a merchant account is not always easy, but once you are approved, the bank or merchant processor will require an initial fee. This one-time fee is also known as an application or setup fee. This initial fee is required to get started with your account.
Once you pay the initial fee, another fee for software and equipment may be necessary. Most merchant accounts will charge fees for setup, fees for transactions, monthly fees, discount fees, and there may be other fees associated with merchant accounts. All merchant accounts are not setup the same, so it is important to shop around for a credit card processing company that will fit your business needs.
The monthly fee is charged as an ongoing cost for keeping the merchant account active. Some banks or merchant processors may also call this fee a statement fee, report fee, account fee, or some other name. Many merchant accounts will charge a few monthly fees. The cost may range from $10-$30 every month.
Another fee is the transaction fee. Most merchant accounts charge per transaction. This costs can be between 20 cents to 50 cents. This costs will vary depending on the merchant account. Another fee connected with each transaction is called the discount fee. The discount fee is a percentage of the amount of the transaction and the type of credit card used.
When you are shopping around for merchant accounts, make sure to carefully read all of the fine print. The fee schedule may not be clear, and you need to pay close attention to the fees before you enter into a partnership with a bank or merchant processor.
A merchant account is essential for the success of your business.
Customers primarily used credit or debit cards to pay for all goods and services, so it is important that you have the ability to process credit and debit cards. There are many merchant account vendors around, so take your time and be wise when you choose one. The best rates go to those businesses that have a clean record, so this is very important. Those with a clean record or good credit will most likely pay the lowest fees.