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Whether you get your merchant account from a
bank or an ISO, you'll face an array of fees. As you consider the offers
from various ISOs and banks, it's a good idea to write down each
provider's fees, so you can easily compare between them - the fees are
numerous, and present a blizzard of variables.
Setup fee This can range anywhere from $50 to $300, in some cases
more.
Monthly fee Most providers charge a minimum monthly fee,
regardless of whether a merchant makes any sales.
Discount rate All providers charge a percentage of each
transaction, known as the discount rate. This varies widely, though
usually fits somewhere in the range of 1.8 percent to 4 percent per
transaction.
Per-transaction fee Most providers charge a fixed fee per
transaction (in addition to the percentage charge). This might range
from .10 to .40 per transaction, regardless of how much the item costs.
Termination fee It's not uncommon
that a provider charges an account cancellation fee, usually if you
close your account within a given time period. Read the fine print on
this one - watch out for those providers that require a 2-year
commitment.
Extra fees When you give a shopper a refund, your provider will
charge you a fee, and this can be a hefty, in some cases $10 to $20.
How to Chose Among Them
As you compare the prices of various providers of Internet merchant
accounts, consider the needs of your business - a deal that's good for
one type of business won't be so good for another type of business.
Low or high volume? If you sell lower cost items in high volume, you
need to find a provider with low fixed fees per transaction; you'd be
willing to accept a higher percentage per transaction charge to get this
lower fixed fee.
Batch or manual transactions? If you chose manual (the cheaper
option) you'll be processing transactions one by one. You'll manually be
routing the credit card information from your online order form to the
card processing company.
If you expect a lot of transactions, you're better off choosing batch
processing. Although you'll pay more, in many cases you'll be able to
provide faster service, and spend far less time doing it.
How turnkey is it? Some merchant account providers take care of
many of the technical and data flow issues that confront online business
owners. For example, as part of setting up an Internet merchant account
you'll need a payment gateway, which is a data-routing bridge from your
e-business to the credit card processor. Some of the big firms that
provide this service include Verisign and Authorize.Net. A number of
Internet merchant account providers offer turnkey solutions, so chores
like setting up a payment gateway are handled for you.
Can you trust them? In response to the many new Internet
merchants that have sprung up, many new ISO's have sprung up to service
them. Not all ISO's are created equal. Some of them hide big fees in the
fine print. It's a good idea to find out what other e-businesses the ISO
services, and how happy those merchants are.
Be careful of rock bottom rates, and those "everyone's approved"
vendors. A good ISO will have a customer service department that takes
calls — and then actually handles issues.
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Page 13 |
Online Money-Making Opportunities
Several Systems to make real money via
Internet
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