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Do you need a merchant account?  If so, choosing the right merchant account provider is one of the most critical business decisions you will make.  

Don't be misled by just a single item of low fees. It is important to add up all the fees and charges before you make a final decision. A merchant provider that offers a low discount rate may look to make money elsewhere, from inflated application fees to statement fees.

The right choice for you will depend on several factors:

  • Are you selling online or offline?
    Online and mail-order merchants can expect to pay a premium because credit card fraud is more common on the Web than in a retail store.
      
  • How high is your sales volume?
    The initial costs of opening your own merchant account is usually higher than when you use a third party merchant services. If you only make an occasional credit card sale, PayPal or other 3rd party services may be a more practical choice.  PayPal continues to expand their services and is the easiest choice for many.
      
  • What types of products are you offering?
    If they are large and expensive, perhaps you ought to choose a merchant account provider that offers a higher flat-rate transaction fee and minimizes the discount rate. The opposite is true if you rely on small, high-volume sales.
     
  • Are you considered a "high risk" business?
    Certain types of businesses are sometimes considered high risk: infomercials, seminar sales, online jewelry, MLM, TelCom, travel, adult or casino sites, as well as international merchant accounts and online merchant accounts.  These accounts can be more difficult to obtain from standard banks. For merchants who want more flexible opportunities than those offered by Paypal or other similar services, who find it difficult to get set up with a traditional merchant account provider, you may need to consider an offshore provider, or one who specializes in hard to place or high risk merchants.

Understand the provider's fee schedules

Make sure to figure out what kind of fees and charges your provider collect and what they will cost you. It is important to understand there are monthly fees as well as set-up fees. When looking for a provider, try to balance the discount rate and per-transaction fee with your needs.

In particular, look for the following fees and rates:

  • discount rate
  • application processing fee
  • setup fee
  • monthly limits

Important things to consider:

  • Did you understand the fees and rate policies?
  • What is included in the setup fee and standard service?
  • How much is this going to cost, and what is the fee structure?
  • What is the performance and reliability of the service?
  • What kind of support will you receive?

 

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