Merchant Credit Card Processing

Written by Gregg Ruais
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Many consumers do not realize that it costs businesses money to accept credit and debit cards. A $100 purchase made at a retail store, for example, will cost the merchant approximately $1.60, but the exact figure depends upon which merchant account provider the business uses. In general, mail-ordered goods and internet transactions cost more money to process. Selling a $100 product over the Internet will cost a company about $2.50.

How to Shop for Merchant Credit Card Processors

These charges may seem negligible, but they add up. This is especially true for businesses that sell expensive products. A used car dealer, for example, might sell an SUV for $20K. By setting up an account with a provider that charges 1/100 of a percent less than a competing processor, the owner of that business saves $20 on every sale of that amount. If he sells 100 $20,000 SUVs per year, he makes an extra $2,000 profit.

Providers that specialize in internet-based transactions might be more affordable for dot-com companies but more expensive for storefront businesses. Some merchant account providers have not kept up with the changing times as well as others, and they may have poor e-commerce service. In general, all credit card processors charge $10 per month for the production of monthly statements, which are invaluable tax tools.

Cost is not the only factor people should consider when selecting a merchant account provider. These companies also offer services, some of which may be well worth higher commissions. Independent reviews can help businesspeople decide which companies are right for them.


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