Maybe you’re in the process of investigating the benefits of opening a merchant account. You’ve probably read the research which points out that customers are more likely to spend more on a purchase when they use a credit card than when paying by cash or check. You’ve probably heard other small business owners boasting about how they were able to streamline the checkout process for their customers and ramp up their profits by accepting payments on the go.
Even though the benefits of signing up with a credit card processing company are endless, there are certain risks you have to keep in mind as well. The following are a list of fees associated with opening a merchant account.
Statement fee. This reflects how much processing occurred during the month and what fees were incurred as a result. Your payment processing company may send you a statement in the mail or you can opt to “go green” and view all of your statements on the Internet. Some businesses still charge a fee for you to access your monthly statement on the World Wide Web. Shop around for those companies that don’t charge you for online access.
Authorization fee. Whenever a transaction takes place, expect to see this fee each time a transaction is sent for authorization by the card-issuing bank. Many businesses charge this fee – whether the request is approved or not.
Monthly minimum fee. If you are an entrepreneur doing a small volume of sales (less than $40,000 a year) you’ll probably get hit with a monthly minimum fee. This fee ensures that the cost to maintain your account from month to month is met. For example, if your monthly minimum fee is $30.00 and you’re only doing $20.00 in sales each month, the credit card processing company may charge you $10.00 to make sure that you’ve satisfied their fee requirements. It pays to shop around to get the lowest monthly minimum fee.
Even though there are fees associated with opening a merchant account, small business owners still come out on top with this form of payment processing. Think of all the sales you’ll be missing by not offering a way of processing credit cards, and the merchant account becomes a highly beneficially tool in your business arsenal.
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