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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.
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