Merchant account costs: When it comes to choosing a merchant account – and on a merchant account provider – one of the most important considerations is cost. Sure, cost should not be the only thing you consider when choosing a merchant account, but it is very important. After all, you are a business. The idea is to make a profit. High cost merchant accounts can result in lower profits. So cost is a factor.
Another way to look at cost is to take it beyond simple numbers. Think of cost in terms of value as well. It’s not just paying the smallest amount. Really, your consideration of cost should take into account what you are getting for your money. Are you getting good customer service? Are you getting another feature that you need in a merchant account provider? These are additional factors that you should consider when thinking about cost and choosing a merchant account provider. You do not want just the cheapest service; you want the best value.
Things to consider when considering value while choosing a merchant account provider include:
- Customer service.
- Addresses issues in a timely manner.
- Professional and friendly.
- Offers the features that you need.
- Flexible.
Not all of the items listed above may be tangible things, but paying a little more for them might make sense, depending on your needs – as long as you are getting a higher level of quality.
But, even though these things are important, they do not erase the overarching importance of cost. It is important to consider the following costs when choosing a merchant account provider:
Standard fees
There are many standard fees that merchant accounts charge. And while these fees may be standard with most merchant account providers, it is true that some may charge less than others. Be aware of the standard fees you can expect to pay when choosing a merchant account provider:
- Discount rate: The fee charged as a percentage of each transaction.
- Transaction fee: This is a fee that is charged for the network of digital information processing. This is sometimes added to the discount rate for a total per-transaction fee, usually around 3% of each transaction.
- Setup fee: Most merchant account providers charge a fee for setting up the account. If you are choosing to switch to a new merchant account provider, a programming fee, to reprogram you swipe terminal, may be charge as well.
- Monthly fees: These are fees that are charged each month, such as a statement fee or a minimum.
Other fees
There are additional fees to be aware of when choosing a merchat account provider that are fairly standard, you may find optional fees charged by some merchant account providers. These fees include such items as:
- Gateway fees.
- Debit pin pad fees.
- Surcharge for foreign transaction.
- Chargeback fee.
- Reserve fund requirement.
- Cancellation fee.
Compare the fees and rates charged by different merchant account providers in order to get a better idea of costs before choosing which merchant account provider is best for you.