subject: Merchant Account Fees: Are They Worth It? [print this page] Merchant account services are the services that allow you to accept credit cards as payments, both online and off, can help you handle the credit card transaction processing. Without merchant accounts, your clients would have to spend with cash or check- and believe it or not, most clients will invest a lot more if they can swipe their card and worry about the bill later.
The Cost of Accepting Credit Cards
Merchant accounts could be costly. There are numerous providers of merchant accounts which are reputable and offer great value for their service- but there are even more providers of merchant accounts that charge excessive fees and have hidden expenses that you were not aware of when agreeing to use their service to accept credit cards on the internet.
Fees range from per transaction fees (usually a percentage or a few cents on each card processed) to monthly or annual maintenance costs that may range from a few dollars to a few hundred dollars.
Online Businesses Need Merchant Accounts
Online merchant accounts are crucial to having a successful online company venture. Consider it from the eyes of a client: if you were on a website, looking to purchase a widget, would you wish to take the time to mail a check or money for you to buy? Or do you plan on making a purchase right then with your debit or credit card? Most people don't wish to take the time to write and mail a check or money to buy for an online purchase- not having the ability to accept credit or debit cards will severely hurt your business as an online merchant.
As the merchant, credit and debit cards make your life simpler, as well. You get your cash much faster than waiting for a client to write and mail a check or money to order; and you do not need to wait for the payment to clear the bank before you can mail out their purchase. Credit card payments offer you payment within a day or two of the client putting in the card details.
Deciding if a Merchant Account is Worth the Fees
So are the costs that are paid for merchant accounts worth the value the accounts provide your company? It all depends on the kind of business you're operating and also the volume of sales you process on a given month, as well as the merchant account provider you choose to go with. Merchant account providers are not a one-size-fits-all solution for every business, and you truly have to do a little research before selecting a provider. Think about the per transaction fee, the application fee, monthly maintenance fee, set up fee, and any annual membership charges you should spend. Do you need to purchase or lease any special equipment? Is the software for processing online credit card payments included in the service, or is that an additional fee?
Once you have that information for a couple of different merchant account companies, you are able to determine what you believe your credit card sales will be every month. This might be difficult to do, but make your best estimate based on your current level of revenue and the idea that people typically invest more with a credit card than they do with cash.
Figure out what fees you'll pay on your estimated amount of revenue every month, and see if it makes sense to pay for a merchant account. As mentioned previously, if your plan is to operate an online business- you really need a method to accept credit card payments online in order to become successful.
