Ecommerce Hosting - How To Choose A Merchant Account
Below is a MRR and PLR article in category Internet Business -> subcategory Ecommerce.
Ecommerce Hosting: A Guide to Choosing a Merchant Account
Introduction
For many e-businesses, finding the best way to accept payments can be a challenging task. Since the Internet is an immediate medium, it’s crucial for an ecommerce site to accept credit/debit cards and online checks. To do this, you’ll need to set up a merchant account with a merchant bank. Once established, an online processor can provide you with the necessary software or gateway to conduct transactions.
Choosing the Right Merchant Account
Selecting the right merchant account is a significant business decision, especially with so many options available. Here are some key factors to consider:
Costs Involved
When choosing a merchant account, be aware of the costs involved. Don’t forget to inquire about each of these fees before making a decision:
- Application Fee: This fee allows the bank or agent to evaluate you as a potential customer. Some firms refund this fee if your application is denied, while others do not. Avoid paying an application fee that won’t be refunded if rejected.
- Minimum Account Billing: This fee ensures you meet a minimum transaction threshold with the bank, typically requiring a monthly minimum of $25 in transaction fees. Anything under $35 is reasonable.
- Statement Fee: If there’s a significant minimum-billing requirement, there shouldn’t be a statement fee. However, some banks charge this to cover administrative costs. If charged, it shouldn’t exceed $10 per month.
- Chargeback Fee: If a customer disputes a transaction, the bank will refund them and debit your account. Banks often side with cardholders, so it's essential to understand the chargeback policy.
- Transaction Fee: Usually 2-3% of each purchase. For example, if an item costs $100, the bank would charge $2-3. Never pay more than 3%.
- Setup Fee: This fee covers the administrative work to set up your account. If also charged an installation or programming fee, there shouldn't be an additional setup fee. Expect fees between $50-$500.
Tips for Approaching Banks
When discussing a merchant account with banks or intermediaries, keep these tips in mind:
1. Read Carefully: Examine all terms, conditions, and charges. Don’t sign anything until all your questions are satisfactorily answered. Understand what you’re getting and paying for.
2. Reserve Account: While not always necessary, start-ups, businesses with poor credit, low expected volumes, or higher-risk profiles might require one.
3. Funds Availability: Ideally, funds should be accessible within 72 hours of processing a transaction.
Available Options for Merchant Accounts
Here are some options for setting up your merchant account:
- PayPal: Allows you to accept credit cards easily on your website with a free account.
- ClickBank: Offers digital product distribution and an affiliate network to promote your business.
- North American Bancard: Provides comprehensive payment solutions, including credit, debit, EBT, and check services.
Choosing the right merchant account is pivotal for your ecommerce success. With the right research and understanding of fees, you can make an informed decision that best suits your business needs.
You can find the original non-AI version of this article here: Ecommerce Hosting - How To Choose A Merchant Account.
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.