How cheap can it get?

Since the demand was high the Merchant Processing industry had been enjoying an enormous growth just until the recent economic crisis. The heightened economic growth also witnessed an impressive development in the Merchant Processing Industry. But this also triggered an unhealthy competition amongst the providers to gain more customers. On the other hand, customers on their part should be cautious about any fraud programs. As a part of a cautious measure, business owners should have a full understanding about the nature of the Merchant Cost Account structure.

Features of a basic account

  • Virtual Terminal

  • No transaction or account limits

  • Configurable branded payment pages

  • Faster payments

  • Chargeback reduction assistance

  • Acceptance of all major credit cards (subject to the location of the merchant), including Visa, MasterCard, Maestro, Visa Debit, Solo etc.

Structure of fees

  1. Transaction Discount Rates and Fee

    •  Type

    •  Internet & Keyed rates

    •  Retail & Swiped rates

    •  Discount Rate

    •  2.20%

    •  1.75%

    •  Fixed Transaction Rate

    •  .20

    •  .20



    These fees are applied on each transaction. The Discount rate means that on each ongoing transaction, the provider will deduct a certain percentage of transaction proceeds. Some providers apply only one of those fees, however some others apply a lower percentage of fees. If your business involves a high amount in a single transaction, you may use the fixed transaction fee, if not then you may choose the other scheme.


  2. Monthly Minimums
    Most internet merchant account processors will charge you a $25 Monthly Minimum fee - which means if you’re not processing around $1200 a month in Visa/MasterCard transactions, you can be charged an additional monthly fee up to $25. As the industry became saturated, the customer bargain power multiplied. Hence if the negotiation is successful, you may erase the Monthly Minimum from your contract.


  3. Cancellation Fees
    Many internet merchant account providers require you to sign a 2-3 year contract. Further then if you cancel early for any reason, most will change you a $200-$500 early termination fee.


  4. Annual or Membership Fees
    A lot of merchant account companies (especially those offering you a “free” terminal) will charge you a yearly fee that ranges from $30-$200. They’ll either call it an annual fee, membership fee, or a risk assessment fee.

Review The Top Merchant Processing Accounts

More Resources

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