May 13, 2010
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News: What Are Merchant Account Fees?
If you are setting up an internet business, you'll be accepting debit and credit card payment processing if you want to accept payment directly through your website. In order to do so, you'll need a credit merchant account or debit and credit card payment processor. Choosing the right credit merchant account can be difficult because there are a number of different fees associated with debit and credit card payment processing. Not all credit merchant accounts are alike. They each come with a different price structure which in itself can be very confusing. The following detail the costs involved; discount rates, transaction fees, address verification fees and gateway fees.
The discount rate is the fee the merchant pays for the overall sale and is calculated as a percentage of the debit or credit card sale. Discount rates cost merchants between two and three percent. Every time a customer uses a debit or credit card on a website, the merchant gets charged a flat fee. This fee is the transaction fee and typically costs the merchant between $ 0.20 and $ 0.30 per transaction. Transaction fees are set rate and is not dependent on the amount of the sale. The fee is the same for $1 as it is for $1,000.
Address verification fees are charged because merchant accounts verify the cardholder's address before approving debit and credit card payments for security reasons. Most businesses will not ship outside the U.S. for fraud protection purposes. Address verification fees are flat rate fees as well and typically cost the merchant between $ 0.05 to $ 0.10.
Lastly, the gateway fee. Slightly more complicated, the gateway fee connects but page with the debit or credit card customer's information with the merchant account. The service provides secure connection between the page and the payment processing company and probably the most important step in the electronic payment processing. The fee varies from company to company. When considering any credit merchant account, you'll want to compare gateway fees as well.