While selecting a merchant account, you need to know about the different types of accounts attainable. This will help you find a merchant account that is suitable for you. Many merchants set out to look for the cheapest account, and end up with accounts, which don't suit them.
A retail/swiped account may offer you the lowest rates, but if the requirements of the account are not met, you may end up paying surcharges, additional fees and even penalties.
There are three accounts that are offered to merchants. These are:
- A retail/card swiped account is meant to be used by retail businesses, which can swipe the card through an electronic card reader. This proves that the card was presented. This type of account is suitable for you if you physically meet your customers and are able to electronically swipe the card in 90% or more of your transactions.
A retail/keyed entry account is meant to be used in a situation where the card is presented, but cannot be electronically swiped. The card number is entered into the physical terminal and a manual imprint of the card is obtained. A higher transaction rate has to be paid for this type of account. It is suitable for mobile merchants who usually swipe less than 90% of their transactions.
Mail order/telephone order/Internet accounts are suitable for merchants who usually don't see their customers and have to cater to a lot of recurring payments. They cannot physically swipe the card at a terminal or take an imprint of it. A virtual terminal is needed to make keyed transactions. Due to the increased level of risk involved, he transaction rates are higher.
The Internet accounts also require that the merchants follow a sure format when seeking credit card payments. Among other information, the payment form must seek the name of card holder, the card number, expiry date and the billing address. All these are used to verify if the card holder is genuine or not.
Several types of fees are associated with an Internet merchant account. Application fees may be demanded up front when you apply for an account. A monthly statement fee is another fee that is charged by some service providers. Then, of course, there is the transaction fee which is negotiable depending upon the volume of transactions promised. There may even be a termination fee.
It is therefore important to compare the different plans and fees, before you select a merchant account.