Merchant account fees can be confusing. It is important to understand clearly what you are paying for before choosing a merchant account. Fees that you need to ask about are:
- set up fees – this is where shopping around is key, all banks are different, be sure that you watch out for these fees.
- equipment fees/ monthly lease rates – Be sure to find out whether it is better for you to own your equipment or to lease it. Be sure to find out what the costs are if you have to terminate your lease or return the equipment, or credit card terminals.
- statement fees – most companies will charge you a monthly statement fee. It can be easy to begrudge this fee but in reality the bank is doing an accounting of your transactions for you. They also take their money out of the account and just deposit the remainder into your account. This can be very convenient for you and save you time, thus the statement fee.
- discount rate – this will vary depending on the merchant account you get, it is usually a percentage rather than a flat rate. Depending on the type of credit/debit card you accept the fee will vary.
- payment gateway charges – providers will charge for security, the use of the software and more.
- transaction fees – most providers will charge you a transaction fee. So, if your transaction fee is .19 you will be charged that .19 every time a customer makes a purchase from you.
- misc. charges – this can even be a minimum monthly fee
- possible rate changes for different payment types (debit, credit, check, e-check)
The merchant account fees that you can incur can add up fast, make sure you keep track of what this is going to cost you and shop around. If you are in limbo or unsure as to what step to take but need a solution fast you may consider PayPal.