| By :
Patricia Strasser
Be familiar with these fees if you are planning on having a merchant account: setup costs, discount rate costs, transaction fee, monthly service fee, internet gateway fee, surcharge, fixed cost, and annual fees. A merchant account is now a handy tool to make a manage a more convenient business online. The number of benefits of a merchant account can negate the costs you have pay for its installation. These are the typical fees you might pay when using a merchant account. Setup and application costs This are charged upon the installation and opening of your merchant account. It is not as common as it was nowadays and most providers don't often charge it. Discount rate costs It take a huge percentage of your total costs and may be considered the most highlighted fee. It is simply defined as the percentage charged upon each sale. This usually range about 2% to 4% in each transaction. Transaction costs The transaction fee is charged to process every transactions made. It is charged on every sale made, whether the transaction is approved or not and independent from your income and size of each sale made. This is commonly fixed at around .30% in each transaction. Monthly service fee This fee is charged by the provider regardless if you have made any sales or not in a specific month. It can be bad if your business is seasonal rather than continuous. It usually around $10 a month, but can be as high as $15 a month. Internet gateway fee This is only valid if you are using an internet payment gateway and irrelevant if you are just using software or a terminal. It is charged by the gateway provider and can sometimes be stated on your merchant account by the processor. It can be as high as $30 a month and sometimes an additional charge can be given. Surcharge These are the additional discount fees that come cards will be charged and only valid to specific card types. They can be applied on some business cards, reward cards, and some international cards. These fees usually range from 0.5% to 2.5% Fixed costs This is charged by the provider for mailing an updated monthly statement and full details of all transactions made. Annual fee Is the annual amount you would pay for the services of your merchant account. Most providers doesn't charge it. Set aside an amount to pay up for these fees, especially if your business is new. After that, with the use of your merchant account, you can witness how much your business would grow and make it seem like the amount for those fees are like close to negligible.
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