In this article you will learn how merchant account fees are charged, what the best type of merchant account is for your business, what a typical credit card processing fees schedule looks like, how to negotiate better rates with your credit card processor, and much more.
If you are selling anything (not just on the Internet) then this article is for you! Why? Because every time you make a sale, no matter what it is, money leaves your business as processing fees. Knowing how to cut down on those costs could help your business grow faster and be more profitable.
There are two types of merchant accounts: merchant account with a flat rate and a % fee based account. Flat rate accounts typically give you a "better deal" but there may be situations where the percentage is better for your business. We'll get into that in another section of this article. I want to stress that you should read the following section regardless of which type of account you choose. It is very important that you understand the terms associated with your merchant account and how to read a credit card processing fees schedule.
***When I am talking about "merchant accounts" in this article, I am referring to two things: (1) merchant account providers and (2) different merchant account type s .
Merchant Account Providers are banks or other financial institutions that provide merchants with the ability to accept credit cards. Just like how people have bank accounts, businesses can also have merchant accounts through which they can process credit card transactions. The different types of merchant account providers are explained in detail at this website. If you already have a merchant account, you can find it listed there (if you are logged in) under "Account Status." If you do not have one yet, the site will help you find one.
Merchant accounts can be of different types. This is because different businesses need to process credit card transactions differently. Credit card processing is complicated and technical, but it boils down to the following types of merchant accounts: (1) retail credit card processing, (2) e-commerce credit card processing (online orders), (3) website donation page credit card processing , and (4) telephone order taker credit card processing.
Retail Credit Card Processing involves accepting payments in physical stores. E-Commerce Credit Card Processing involves processing online credit card transactions, for example when someone buys something on Amazon.com or makes an in-app purchase on their iPhone/iPad. Website Donation Page Credit Card Processing is what you use when you accept donations through your church's website . Telephone Order Taker Credit Card Processing involves taking telephone orders for physical products.
Depending on what your business does, you may need to get a retail, e-commerce, website donation page, or telephone order taker merchant account. I would strongly advice you not to use the same account for multiple purposes because doing so will complicate your accounting and may cost you more money in the long run. If you are not sure what type of merchant account you need, the website mentioned above has a list of ecommerce credit card processing providers. If you are looking for free credit card processing , check out this article.
