Merchant Account Essentials

Have you taken a close look at your merchant account within the past year? My guess is that you have taken a look, but you think you are too busy and its not important enough to sit down and take a close look. The fact is, there can be large differences between vendors for these accounts, and you ought to take a close look now and again to see if you can save money by moving from one to another.

Some companies offer an attractive package for switching over. You might see some ads on the internet about companies who are only charging 1.99% per customer’s purchase done by internet and 1.39% for all of those that are done inside a retail center. Why is there a difference? In general, merchant accounts will charge more for those that do not have a live body and a real embossed plastic card right there. There are a higher percentage of problems that come from those done over the internet. That doesn’t mean that you need to worry – it just means that the fraud protection unit is on duty and they charge a little more for those that are more likely to cause trouble.

There is also another charge called a transaction fee, and this might be as low as .15 each or higher than .25 each. If you are charging the customer $400 for your product, then the nickel or dime per transaction will not matter so much, but the difference in the percentage would mean $2.40 on every purchase, just between the internet and the retail fees, for instance.  On the other hand, if you do 1,000 transactions per day with each being about $50 or less, then the amount per transaction fee might make more difference to you. 1000 fees of .15 each would be $150 whereas 1000 fees of .25 each would be $250. That might be daily, or weekly, depending on your business. But just think how you might spend the money that you save just by changing to another provider!

It is essential to take the time every year or so to compare your current rates with the others that are available. You might also be able to find yourself a sweet merchant account deal that offers a free gift such as a credit card terminal or a period of time with lower fees, just for switching. It’s most probable that the amount that you save will surpass the cost to you, or another staff member, for taking the time to do the research.