Guide to Credit Card Processors

Where does someone start when looking to open a merchant account?

There are hundreds of companies on the internet that currently provide these services in an unregulated industry.

I recommend: Companies such as Power Pay Services and Merchant Account Services are BBB members which provide retail and internet solutions.

The fees involved which merchant accounts consist of; transaction, ACH, Decline, Annual, Chargeback,

The fees may look extensive but by working with a reputable processor you can maximize your profits and minimize the headaches. A transaction fee is a flat fee for each transaction. Usually $.20-$.30. ACH fees or batch fees are daily fees for everyday that you have processed cards. For example if you are open Monday- Friday and process cards everyday you are open, then you will be charged an ACH fee each day (Monday-Friday) which is usually $.25-$.30. If you are closed one day and process no cards then you will not have to worry about the ACH fee on that day. A decline fee is a fee that is charged (usually $.25) for every card that is declined. An annual fee is a fee that is charged yearly for service.

I recommend: A chargeback fee (usually $25) is a fee that ALL processors have. This states that if a customer is satisfied with a transaction they have the ability to chargeback the amount and the merchant will need to deal with the bank directly to try and receive the funds back. Early cancellation fees are just what they sound like, fees that must be paid if the merchant cancels the merchant agreement before the term of the contract is up (usually 36 months). The minimum monthly discount fee is a fee accessed for merchants that do not process the minimum set in the contract (usually $2,500). The discount rate is the percentage that is charged on every transaction. The discount rate ranges from 1.75% for retail to 2.25% for internet merchants. If you business is considered “high risk” you can expect to pay 7.5-8.5%+.  High risk companies would include; travel timeshare, adult, pharmacy and business opportunity companies.