Selecting merchant account

Some basic things which should be kept in mind before chosing a merchant account provider .


Shop around and then shop around some more - this is a very confusing section of ecommerce. If you make enquiries with a company and they don't respond within 24 hours, or are somewhat vague in their responses - run like hell away from them. Banks are notorious for utilizing poorly trained salespeople rather than those with hands-on product knowledge or an understanding the complexities of ecommerce. Ensure they explain all charges to you thoroughly by enquiring about the following rates:

1) Statement - the charge each month for issuing you statements on all transactions

2) Application fee - some institutions will charge you for the privilege of applying for an account, regardless of whether your application is successful or not.

3) Setup fee - once your application has been approved, there may be other fees associated with establishing the account.

4) Discount Rate - a percentage deducted for each product sold. Also known as the Discount qualified rate

5) Mid-qualified and Non-Qualified rate. A higher rate for transactions that don't qualify for the discount rate. Usually applied in circumstances where AVS is not checked or the card is keyed in by the merchant.

6) Transaction fee - added to the discount rate, a flat rate on each transaction

7) Monthly Minimum - what you will be charge regardless of the level of sales each month.

8) Reserve - some providers require you to maintain a certain level in the account to cover chargeback fees.

9) Chargeback - the killer fee which may cost you up to US$30 per fraudulent transaction (which includes any client disputing a transaction successfully).

Great stuff man. its really very beneficial for someone who wants to start a new merchant account.
Thanks for this great post.