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Choosing A Merchant Account Provider

   By: Mary Hedden

When looking for a merchant account provider, it is important to do a lot of research. You do not want to pay too much or sign up with a disreputable company. However, you do need to keep in mind that once you do sign up it could take up to a week for your application to be approved once it has been submitted.

There are three main factors that you should consider when selecting a merchant account provider.

1. Price
2. Integrity
3. Customer Service

Price (Merchant Account Rates and Fees)

When shopping for a merchant account, it is important to understand all of the rates and fees that the merchant account provider charges.

You will typically be charged the following fees:

Monthly Fee - Normally around $25 US and could vary depending on whether you meet your minimum monthly transactions.

Discount Rate- Percentage taken from a sale that the merchant pays to cover the costs of the transactions and the risk involved. Usually 1.5 percent to 3.5 percent.

Transaction Fee - A flat fee charged for each transaction. Typically between $0.20 and $1.00 US per transaction.

Application Fee - The initial fee you are charged to open the merchant account. Many merchant account providers do not charge application fees.

Equipment and Installation - Software can range from $0 to $1200 US or more depending on whether you have batch or real-time processing. Costs for hardware (POS terminals) can range from $500 to $1,500+ depending on the model you purchase.

If you have current or projected sales data, you can forecast what your fees will be for different merchant account providers. has done this for you with the top internet merchant account providers in their database. If you visit, you may enter your monthly sales data to compare fees for their recommended providers.

Integrity of the Merchant Account Provider

It is extremely important to consider the integrity of the merchant account provider that you select. There are a number of providers in the merchant account industry that cannot be trusted.

Here is a list of some red flags to look for while shopping for a merchant account.

1. The website of the company has misleading ads such as “Free Merchant Account” or “Lowest Prices Guaranteed”. Research these ads carefully to find out exactly what they mean.

2. You repeatedly get an answering machine every time you call.

3. They are using a free domain name or a free web hosting service. (If they cannot afford a domain name, then they probably should not be in the merchant account business.)

4. They do not answer your questions precisely.

5. They have rates and fees that are not posted on their website.

Make sure you search the internet for reviews of the company and for any unsatisfactory remarks.

Customer Service

Customer Service is key for smooth transaction processing. Try calling their customer service number to ask them some questions. Pay attention to the amount of time that you are on hold. Make sure that have friendly representatives that are knowledgeable and answer your questions precisely. They should be genuinely interested in helping you.

Superior customer service should also have a toll free number and provide 24/7 availability.

Although the integrity and the customer service are extremely important when choosing a merchant account provider, don’t be fooled into thinking that you should pay more for these services. If you do your research and shop around, you should be able to find a quality provider that does not charge high fees.

About the Author

Mary Hedden is the owner of - is dedicated to helping you find a merchant account provider so that your retail or internet business can start accepting credit cards for less. Permission is granted to reprint this article as long as no changes are made and the resource box is included with a link to

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