Payment Processing Rates and Merchant Fees

There are plenty of merchant service providers on the market that will provide you with the same quality service at a low cost. The cost involved in setting up an Internet merchant account and making purchases has drastically fallen over the years. However, processing rates and fees for an Internet merchant account have pretty much stayed the same.

You might even find a company that doesn’t charge a lot of the typical monthly fees charged otherwise. Using a low cost merchant service is the best way to go. You’re spending less money on a merchant account doesn’t mean that you will get poor quality services. Companies that charge a lot for their services are just trying to extract more money out of you.

The transaction fees that you need to pay will be determined by the products and services you sell. For instance, if your products are small, inexpensive and sold in high volumes then it is beneficial to choose a provider that offers low transaction fees, which usually range between $0.20 and $0.70. Otherwise, the fees itself will eat up your profits.

In many cases, the length of time you have been in business will influence the number of transactions you have on your site and the level of your transaction fees. For instance, some banks require a minimum number of transactions per month. If you do not meet this minimum, you could be required to pay additional fees. Some banks will ask you to estimate the number of transactions you expect on your site. If you are a new business, estimate conservatively.

Merchant account providers offering integrated systems (turnkey solutions) that include each of these components, as do hosting companies and E-commerce solution providers, which bundle merchant accounts and other services into their packages can be costly because in many cases they work with agents who make their money through commissions. As a result, costs are often ‘marked-up’ so the provider can make an acceptable profit. On the positive side, working with a merchant account provider that offers integrated services means that each level of the transaction is compatible with the other.