When comparing the cost of internet
merchant accounts there are three major areas you need
to evaluate - Set-Up Fees, Monthly Recurring Fees and
Total Risk Estimate (TRE). After reading and fully
understanding this section of the guide, you can use the
worksheet in Appendix A to help you compare the fees and
risks from various providers. This worksheet is also available
in an Excel spreadsheet. If you did not get the spreadsheet
just use the contact information at the bottom of this
page to have one emailed to you.
Setup Fees - Setup fees are the costs associated
with starting the account and "going-live." Note that
setup fees are normally non-refundable, (except through
our Independently Owned Agency of Cardservice International)
Our Agency offers a 100% Money Back Guarantee of any upfront
fees. While searching for a Merchant Account Provider
you may find companies which advertise free setup fees.
As shown in other sections of this guide, totally free
start-up often means poor service and hidden fees down
the road - but not always. Setup fees should be very reasonable
but if you see free setup fees, proceed with caution.
The following is a summary of setup fee terms you may
Application or Setup Fee - A one-time charge for
processing a merchant application and activating the new
Re-programming/Programming Fee - A charge assessed
for reprogramming your existing terminal, software, or
Point of Sale (POS) equipment. You know that you are talking
with a commission sales person when he or she insists
on a "reprogramming fee". You should negotiate this. If
you are anticipating any kind of credit card sales volume
at all than you can probably get this fee reduced or waived.
Site Inspection Visit - A Merchant Account Application
sometimes requires a "site visit" of your place of business
to make sure you are legitimate.
Installation or Training Fee - If the company has
good customer support, this is just an excuse to add fees.
Don't pay any.
Activation Fee - If in addition to an application
or set up fee, it's probably just an excuse to add fees.
Don't pay any.
Software Licensing Fee (Internet) - You may run
into this, particularly if you are licensing software
to do business over the internet. Do NOT lease software.
Shopping Cart and Catalog Setup Fee (Internet)
- A shopping cart and catalog is a tool to both
total the amount of money a customer wants to pay you
on the internet and a system to organize your products
prior to ordering on the internet by the person viewing
your website. Setup fees vary depending on the sophistication
of your needs and your number of products. If your needs
are very sophisticated - which is rare - you may pay much
more because you need a customized solution.
Recurring Fees - Recurring Fees are primarily the
monthly fees to process and track transactions and pay
the Merchant Account Provider.
Discount Rate - A percentage charged on the volume
of a sale or a returned (credit) transaction. This can
be from 1.4% on up depending on your transaction fee and
whether you use a terminal and "swipe" the credit card
in a "card Present" environment; or key the credit card
information into a terminal, software, or on the internet.
Generally swiped rates are about 1.5% to 1.85% and keyed
rates are 2.25 to 2.75%.
Transaction Fee - A charge assessed per each type
of authorization submitted by a merchant. Try to "bundle"
your discount rate so you do not have a transaction fee.
Your rate will be higher but by doing this you may be
able to save on the transaction fee for authorizing a
transaction which you later void; and also save on the
transaction fee when you batch out your transactions -
typically each day. A transaction fee usually ranges from
a dime to thirty cents per transaction.
Monthly Customer Support Fee - A charge that should
ensure quality customer service 24 hours a day, 365 days
a year. Customer support should be Toll Free and you should
not have to stay on hold to speak with someone.Should
English not be your language of choice then customer support
should be available in your language. Call at variable
times - including weekends - before you commit to a Merchant
Account Provider. You will need good customer service
which is available for no additional charges.
Monthly Statement Fee (hardcopy) - Should be available
Monthly Minimum Fee - A fee charged if the total
monthly discount rate amount for MasterCard and Visa does
not reach a threshold. Usually you do not need to worry
about this if you are expecting MasterCard Visa sales
to be more than $1,000.00 per month.
Daily Batch Fee - Monthly fee paid for processing
each daily batch. Batches are typically processed each
day the merchant has transactions. This should be no more
than your actual transaction fee per batch. Merchants
typically batch out each day.
Annual Fee -. Annual fees, if any, usually range
from $50.00 to $150.00.
PCI Compliance Fee - Typically this will be an
annual fee to make sure you are not putting your customer's
credit card information at risk. Depending on your transaction
volume you should not have any monthly fees once you are
Address Verification Service Transaction Fee (AVS)
- A storefront Merchant who is swiping cards on a
terminal will not have an AVS fee for swiped transactions.
However, all orders that are keyed; whether storefront,
mail/telephone order, or internet, shall many times have
an AVS transaction fee. This should be no more than five
cents for each transaction that AVS is attempted.
Monthly Secure Payment Gateway Fee (internet) -
A charge assessed to provide merchants with the ability
to process transactions securely over the Internet. This
should range between $10.00 and $30.00 per month.
Monthly Shopping Cart and Catalog Fee (internet) -
Many times your shopping cart and catalog for your
internet web site is hosted with the shopping cart and
catalog hosting company.