Forums: Discussions for entrepreneurs and small business.

I would have an idea of how much it might cost to have a merchant account. I am interested in having a merchant account for selling products online. I've heard of different rates in the US. Can someone please give me more ideas?

It's safe to say that no two merchants pay the same fees.

It really depends on the volume of sales and the size of the average sale.  I do very-very low volume sales (20 in a month would be good) and PayPal is my best option.  The per-transaction fee is higher than a traditional merchant account, but there are no monthly account fees and no hardware rental rip-off.  No transactions, no fees.  It's almost too simple.  If you have a bank account, they should be able to provide a merchant account for you. 

Many people get sucked into buying hardware (the card reader) when 100% of their sales is online.  Go somewhere else if this is a "requirement" (it's a $25 card reader that is marked up to astronomical prices for an instant profit for the account supplier).  Even worse is the merchant accounts that have a monthly account fee and then they RENT the card reader to you for more than it costs - pure profit for them.

Do the math and then decide if the lower per transaction fee is worth paying a monthly account fee for the volume of sales you expect, or keep it simple and use PayPal but pay more per transaction.

Google and Amazon are also entering this area as well, but I have been using PayPal so long that I have no plans to even check out other services.

Your bank can give you the best idea, but you probably don't need a "real" merchant account yourself unless you're doing a lot of volume. What most people start with is a service that has their own merchant account. they sell you a psuedo-merchant account.

Fee's vary by volume - number of purchases per month, high, low, and average purchase cost, type of product - physical or intagible - e.g. is it a mountain bke, or a download?, the way you confirm the cc info/customer, and the number/percentage of chargebacks. And also if you are a "real" business - e.g. legally - and if so, for how long.

I resell for e-payment and they're pretty good from a resellers viewpoint. I also like ikobo and 2checkout. Leaning more towards ikobo no recent problems in the past year, low fees, nice api, good charge-back policy, and easy access to the $.

ikobo and 2heckout would be on my A list for someone just getting into e-commerce. e-payment is a little more involved. I like e-payment for recurring billing, but 2checkout, and I believe ikobo have both got new capabilities in that area.

All payment services have had problems art one time or another. ikobo, 2checkout, and paypall seem to have put most of them behind them. Paysystems is going through a bad time right now, and it would be best to avoid them - IMHO.

EDIT: BTW - $ savings on cc fees by being a "real" business" will often cover the cost of getting set up as an LLC within the first year given a moderate amount of sales.

I went with PayPal.  It's flexible:  if a customer has a PayPal account, checkout is a breeze.  If they don't, then it's just like any other credit card transaction.  They also have a buyer/seller protection program that I think is fair.  And, their automated shipping module is extremely convenient.  I can create a shipping label for a dozen different orders and simultaneously send the recipients a tracking number, with only a few mouse clicks.

Paypal is a great way to start but after time I found their hyper security a pain.... they were declining about 1-% of my customers credit cards (When the customer inputted any information that was incorrect Paypal would just lock them out)... then when I used my Paypal account to pay a SEO vendor in India  they thought it was suspicious... Locked down my account so I could not withdraw funds for 3 WEEKS!... while I waited for the internet giant to MAIL me a passcode that confirmed I lived at the address I used... "All routine"... Now I am in the process of switching to my local bank option with an API interface...

You are correct, you'll see the same rate package shaped in a thousand different ways designed to make you think one is better or different than another.  Here's the bottom line for an internet seller:

Depending on your credit, product type and other factors, your percentage will be in the neighborhood of 2.20%.  You'll hear quotes all over the place, higher and lower, but all wth hidden surprises.  At the end of the day you're gonna pay around 2.20% for most of your transactions. Tack on about $.27 per item and $-8 month service fee.

You'll also need a gateway provider.  You're talking approx $20 a month and
$100 setup.

Here's the trick:  If you do small volume, trade a higher percentage rate for lower fixed monthly fees, such as monthly fee, monthly minimum etc.  That's like buying a dollar for a quarater, not a bad deal.  Most newbies don't get that, they tunnel vision on the lowest possible rate which is a mistake.

Check out our website for a variety of articles, info, and ecommerce processing alternatives:  www.MerchantServices-help.com

Paypal?  Not a bad idea to have Paypal as one of your payment options.  But to have PP as your ONLY payment option is guaranteed failure.  Too many people simply refuse to divulge cc info to Paypal due to security concerrns.  The hassles for non PP members will also cost you a ton of business.  Again, Paypal as one of your options, but NOT as the only option.

Good luck

AMSPCS

amspcs@juno.com

I use paypal and clickbank

Clickbank is a onetime fee of 50 dollars.

They handle the refunds, sending you the check or direct despoit

also they pay your affiliates for you.

I've been using them for years and never had a problem.

Also other merchant accounts you can look at are

Google Checkout

2checkout

1shoppingchart

Ipowerpay

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here is a guide to accepting credit cards.  it should answer some of your question and is a good spot for information on the industry

I use paypal for years, they charge me 0.3+3.9% each time.

Always go with Paypal. A merchant account can be routed to your own bank account. Fees are only very small, but each transaction is not the same.

You can also take a look at this page: http://www.netidnow.com/merchant-accounts.html, the prices are almost inline with the average pricing.

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