How To Compare Online Credit Card Merchant Services

Comparing online credit card merchant services may be very vital when facing the question of either getting merchant account X or getting merchant account Y. The problem may become worse when more than five accounts need to be compared.

Comparing online merchant account services is not just a matter of looking at rates and charges; it’s looking into and over the service on the whole. The job of comparing credit card processing services may be made easier by finding online merchant account comparison charts, overviews, testimonials and reviews.

Comparison Charts – One of the most effective ways to choose one credit card merchant account service from several, giving you an almost complete overview. Comparison charts are great if you don’t have any specific merchant account providers in mind; if you’re just looking for a provider and you don’t know where to start. Credit card merchant service comparison charts can be found on the Internet, on many credit card processing websites. A typical chart will have a vertical list of service providers (anywhere from five to twenty companies) and a horizontal list of the compared rates and features. The list of rates and features is important for you. A typical list consists of: Registration Fee, Gateway Fee, Statement Fee, Discount Rate (or Commission), Transaction Fee, Monthly Limit (or Monthly Minimum), Technical Support Charges. Other features and rates may be compared, but we will concentrate and review these basic and most common ones.

The Registration Feeis the fee that is paid only once when signing up for the service. It may exclude additional application fees, like consultation fees. It may include some additional services, like shopping carts. The Registration Fee ranges from $0.00 to $600 and up. Note that everything is balanced, if the registration fee is surprisingly low then other fees and rates will be higher to compensate (and sometime to overcompensate) the total credit card processing expenses. It’s very hard to get a bargain, unless aided by a professional merchant account provider.

The Gateway Fee that is charged for the monthly ‘rent’ of the credit card processing gateway service. The Gateway Fee, like the Registration Fee, may vary drastically. Some merchant account companies do not charge a gateway fee, while others may charge a fee of $30.00. Some companies do not include the Shopping Cart monthly fee into the Gateway Fee, leaving you stumbled when you find out that you’ve been charged an extra $21.95 for the cart (so much for saving!).

The Statement Fee, also referred to as a Maintenance Fee, is the cost of the statistical information provided, usually, at anytime. This statistical information reveals all the transactions which were processed by the credit card processing gateway in detail. The fee may range from $0.00 to $15.00 and over. Again, keep in mind that you will underpay for one thing and overpay for another one.

The Discount Rate is the percentage that is withheld by the merchant account provider from each and every transaction, regardless the amount. There are low discount percentages, from 1.5%, as well as high ones, up to 7.5%! A Discount Rate of 5% will withhold $5.00 from every $100 your credit card gateway processes. Local Discount Rates usually differ from International Discount Rates, and currency conversion makes International Discount Rates even higher.

The Processing Fee is the fee you have to pay for each and every transaction processed by the gateway. The fee ranges from $0.10 up to $0.65 and higher. And, as well as with Discount Rates, this fee varies according to whether the transactions are Local or International.

The Discount Rate and Processing Fee work in combination. The Processing Fee is charged for every transaction made, and the Discount rate withholds a certain percentage of the amount of money transferred.

The Monthly Minimum is the minimum sum of credit card processing fees that you’ll have to pay per month. This part is a little tricky, but easy to grasp using examples. Typically the Monthly Minimum regards Discount Fees and Processing rates only, and is usually around $20.00. This means that the total amount of Discount Fees and Processing Fees must be greater than the credit card service Monthly Minimum. For example, the total amount of Discount Fees and Processing Fees for May 2007 sums up to $15.50, which is not greater than the Monthly Minimum. You will have to pay the difference to your credit card processor, i.e. $4.50. If your Discount Fees and Processing Fees sum up to $23.45, for example, you will not have to pay anything, as you’ve exceeded the Monthly Minimum. The Monthly Minimum is closely connected to processing volumes. Make sure that your e-Commerce business will process enough volumes to annul the Monthly Minimum.

The Technical Support Charges are charged for the merchant account provider’s support services. Technical support services may include e-Commerce resource setting up, debugging, programming, basic help, problem solving and troubleshooting, etc. Technical support is very important if you’re not a professional web-programmer. For example, shopping carts are integrated by members of the technical support team of your merchant account provider, without their help you may be left on your own and without a working shopping cart system. Technical Support Charges may be included in the Registration or Monthly Fees, or may exist as a separate fee of anywhere from $9.99 to $50.00.

After having thoroughly examined and re-examined a comparison chart you will need to visit two or three merchant account providers’ websites, which seem to suit you best. Merchant account providers’ websites will usually include up-to-date rates and charges tables, additional information and help. You will also find telephone numbers which can be useful if you are not sure of something.

Another great source of information on those few companies you’ve chosen can be found on independent forums, blogs and online e-Commerce merchant magazines (also known as e-Zines). Such places may offer extended overviews and reviews from professional consultants and experts. Forums and blogs may have testimonials and short reviews, experiences with working with some of the merchant accounts out there, etc. Note that there could be some testimonials and reviews spreading misinformation.

It’s evident that before signing up for any credit card merchant account you will have to explore the huge market of e-Commerce merchant accounts and gateways, the many credit card services offered and the dozens of companies offering them. Always take your time when choosing, as your e-Commerce business will definitely depend on this choice. Don’t forget that most merchant account service providers also have a rather big Termination/Cancellation Fee.