Merchant accounts enable you to accept credit card payments whether online or in a retail setting.

In order to accept credit card payments through your website you will need a payment gateway. A gateway is an intermediary company that provides a code for transmitting your customers’ orders to and from the merchant account.

The merchant account is an actual account with a financial institution or bank that will allow you to accept credit card payments. If your bank does not offer an online merchant account, there are literally thousands of merchant accounts available to you that are specifically dedicated with online capabilities.

Customers expect credit card purchasing to be available, so you will need to apply for a merchant account immediately upon deciding to sell products online or in retail settings. As with all aspects of your business, investigate your options thoroughly and select the merchant account provider based on reliability, ease of transactions, and your expected sales volume.

Fees incurred with merchant accounts may include up-front application fees, on-going (monthly) fixed fees, discount rates, fixed transaction fees, termination, and other miscellaneous fees.

Every provider will charge a fee per transaction; this amount will remain the same regardless of the amount of the sale. Whether your sale is $1.00 or $1,000.00 the amount of the transaction will always remain the same.  The discount rate is the sales commission the provider earns per sale made, with this amount usually between 2% - 4%.

Termination fees are generally applied only if you cancel your service before the contract is up; a typical contract is for one full year, after which you may be required to enter into another binding contract.

Miscellaneous fees may occur for refunds given to buyers and other fees that could apply when using a merchant account. It is imperative that you read the contract in full and understand what it’s saying.  If you do not understand something, ask them!  Most companies want your business and will be happy to answer questions.

All of the fees aside, it’s quite simple to find a merchant account provider that is easy to work with and does not charge exorbitant fees.