How to Choose an Internet Merchant Account Provider

With almost 550,000 results in Google and another 68 million results in Yahoo, your choices for an internet merchant account provider are endless. With that many results available, making the right choice to accept the right provider can be a daunting task. So how do you know if you are getting a good deal or if the provider you have selected is reliable? The truth is that you may not know until problems arise. Our site gives you a basic run down of how internet merchant account providers and credit card processing works as well as makes recommendations for some of the best services available.

How Credit Card Processing Works When a consumer makes an online purchase, the transactions goes through 6 steps. (The information below is an abbreviated version of what happens during the transaction.) The purchase is made on a secure and encrypted page to keep the customers information safe. The shopping cart gathers and compiles the information and sends this information to the processing company also known as the payment gateway. The information is then verified, processed and sent via the payment gateway to allow the the transaction to be completed and the credit card to be charged. The credit card company verifies the card and account information and either confirms or denies the purchase. If the purchase is denied a code will be sent back and if the purchase is approved, the credit card company will acknowledge that the requested amount will be transferred. The payment gateway will acknowledge the successful purchase and the shopping cart will then let the customer know of the order status. The payment gateway will then initiate the fund transfer (settlement) to the merchant account so that the funds can be deposited in the merchants bank account. The internet merchant account then collects the funds and makes the transfer to the appropriate bank account, completing the transaction. Fees and Rates Understanding the fees and rates associated with an internet merchant account and payment gateways, can be extremely confusing. While they look complicated they are actually a lot simpler than you realize. Basically, you will have three standard fees for both the merchant account and the payment gateway. One time fees - these are fees normally associated with creating and setting up your account. These fees normally range from $149.99 to $199.99 and can be more expensive or waived altogether. Monthly fees - these fees are both fixed and variable. The fixed fees include monthly gateway and statement fees. Variable fees include discount rate and per transaction fees. These fees are variable because they will change from month to month depending on the number of transactions and total sales. Miscellaneous fees - these fees include termination fees, refund fees, minimal fees, etc. These fees will be hidden in the fine print and should be carefully scrutinized. How to Choose a Internet Merchant Account Provider Before getting started, you should realize that this is a very competitive industry and merchant account providers want your business. This means that you should shop around and negotiate the fee structure before signing. While the list below is not all inclusive, these are some of the things you should consider before signing. How long is the contract. While most contracts are for 1 year, be on the look out for 3 or more years of commitment requirements. Look for merchants that have a well established reputation such as Charge.com Find providers that do not have application fees and are very competitive when it comes to the fees and rates. How helpful is the sales rep. If the rep cant give specific information on fees and approval information, you should move on.