ACCEPTING CREDIT CARDS - MERCHANT ACCOUNT

Merchant account is a special type of business account opened by a bank (or other merchant account provider) to process credit card orders. A credit card payment go through a number of steps (see Typical Credit Card Transaction section) and finally money go to your merchant account. It should be stressed that it is more difficult to open a merchant account than a business checking account. A bank, before opening a merchant account, usually requires detailed information about the nature of your business and their representative may visit your business to make sure it actually exists and is about what you wrote in your application.

The fees charged for merchant account can be broken on three categories:

Discount Rate

This is the percentage of transaction amount taken by the bank. Depending on volume, type of credit card used and the nature of your business the discount rate typically range between 2% and 5%.

Transaction Fees

This is a flat amount you pay per transaction. Typically the transaction fees range between 20 cents and 80 cents per transaction.

Monthly Fees

Typical merchant account monthly maintenance fee range between $30 and $100 a month. In addition to this you may be charged some additional fees (like statement fee, technical support, etc.).