What is a Merchant Account?

So you’ve created a website and now the question is this: Are you going to make it an informational site or are you going to sell your products and services from your site? If you decide to sell your products or services, you’ll need to be able to accept credit cards. I’ve created a list of questions that you should ask any credit card processor. These questions will help you to know what to expect from these companies and choose the merchant account provider that will work best for you.

Do they charge an upfront application fee?
You’ll find that most companies do charge an application fee which is usually $25 and it has to be paid up front. Some companies charge much less then this ($10-$15) and some companies don’t even charge an application fee.

Do they charge a set up fee?
Again, you’ll find that some credit card processing companies do and some don’t. In most cases, what you’re selling will determine if there is a set up fee and how much it is. Some companies won’t charge a set up fee and some will charge a few hundred dollars. Be sure you know what the charge will be up front so that there are no surprises.

What is a virtual terminal?
Here is a great example of a virtual terminal:
http://www.eadvancedpaymentsolutions.com/vterm.html. A virtual terminal is basically the online version of swiping your credit card at a department store. It handles the transaction in real time, verifies the credit card information, and even completes the sale by sending electronic notification of the transaction to the buyer’s email address.

And it does all of that in only a few seconds, which is usually faster than most department stores.

What does the virtual terminal cost?
Prices have lowered considerably in recent years for this service. Some companies charged as high as a few thousand dollars for a virtual terminal and some companies would lease it for $40-$60 per month. Nowadays, virtual terminals can cost as low as $100-$300 with the price varying by the type of product or service that you’re selling. And monthly fees have lowered as well to about $10-$20 per month for a virtual terminal. If you dig a little deeper, you can also find some companies that don’t charge a dime for a virtual terminal, so be sure to do your research thoroughly.

What are the customary rates and monthly fees?
Rates and fees will vary depending on the company and the types of products being sold, but it is a fact that if you accept credit card payments, you’ll make 50-1000% more in sales. If you are selling any type of product or service online, it is an absolute must to be able to accept credit card payments. If you don’t know what you should be charged from a credit card processor, you should contact your web hosting company. There are many credit card processors that have specials deals in place for customers of particular web hosts and you need to find out if your web host has that type of discount available for you.