Merchant Accounts
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There are several different kinds of merchant accounts. Continue this article to learn more about them.
What Is a Merchant Account?
Most merchants with a storefront have a retail merchant account. This is the account that allows them to accept not only cash and checks that they deposit into their bank account, but also credit card charges and debits. In effect, it enables the merchant to engage in cashless commerce, with the account geared for the merchant's daily revenues. Services included in this type of merchant account include a Point of Sales (POS) system: the terminal for processing credit card transactions by swiping the physical card on site.
Cashless commerce processing is essential for companies that want to engage in eCommerce. Short of waiting for checks in the mail, there isn't much other choice. The answer is an Internet merchant account. With these accounts, a dedicated payment gateway over the Internet is set up to handle credit card transactions made through an eCommerce website. See the article "Payment Gateways."
Other Features to Look For
Besides the basic services, there are other elements of the merchant's account that are important to check:
- What are the card processing rates - the per transaction fees that the merchant account establishment charges you?
- Is there a set-up fee?
- Is 24/7 telephone customer and tech support provided? Is it toll-free?
- VISA and MasterCard are usually a given. What about AMEX and Discover Card - is there a set-up fee for those?
- Is fraud protection provided?
- Are next day deposits available?
- Is wireless processing of credit cards included?
- What other services are offered (and at what price)?
How to Find a Merchant Account
Merchant accounts are offered by companies that specialize in this particular field - like MerchantAccount.com, through banks - like JPMorgan Chase and Wells Fargo, and through payment sites like PayPal or Google Checkout.
Fees
Here is a summary of some of the fees. In general, the fees include a percentage of monthly transactions plus a charge per transaction.
| Merchant Account Provider | Monthly Sales | % | Transaction Fee | Monthly Charge |
| Google Checkout | <$3,000 | 2.9% | $0.30 | — |
| Google Checkout | $3,000-$9,999.99 | 2.5% | $0.30 | — |
| Google Checkout | $10,000-$99,999.99 | 2.5% | $0.30 | — |
| Google Checkout | >$100,000 | 1.9% | $0.30 | — |
| PayPal Website Payments Std. | — | 1.9%-2.9% | $0.30 | — |
| PayPal Website Payments Pro | — | 2.2%-2.9% | $0.30 | $30.00 |
| MerchantAccount.com | not available | ------------- | --------------- | ------- |
| Chase Paymentech | not available | ------------- | --------------- | ------- |
Wells Fargo has a $99.00/location set-up fee, a $35.00/month service fee; a $40/year "annual compliance support fee"; a $7.50/month statement billing fee for paper statements; a 2.40% charge on gross credit card sales and non-pin debit card sales, charges for each authorization attempt; a chargeback fee; a voice address verification fee; and additional charges for Authorize.net, CyberSource, and PayPal PayFlow.
Of course, you should do more research before making a choice, but even with this general information, you can see that the choice of merchant account provider may make a significant difference in your bottom line.
Related article: Accept Credit Cards Online