Three Things You Should Know when Accepting credit Cards with an Online Merchant Account

If you own of a small business, you should consider accepting credit cards, as this can greatly increase your sales revenues, simply because you give customers more alternatives on how to pay you.

To be able to accept credit cards and make this method of payment valid, it is necessary to set up a merchant account. The most convenient way to do this is to set your merchant account so that you can make online transactions.

A merchant account is a type of bank account that enables businesses accepting payments through credit or debit cards. Three different parties (the retailer, the payment processor, and the merchant bank) are involved into merchant account set-up process. All credit or debit card transactions are settled by the payment processor.

The main benefit of online merchant account is that payments can be processed without credit card processing machine or terminal.

There are three things you should know, if you consider accepting credit cards via an online merchant account:

1. It is necessary to choose an online payment getaway

A payment processor responsible for making your transactions is called a payment getaway. This e-commerce service authorizes payments for e-commerce transactions or online transactions.

Generally, a getaway consists of an interface between the gateway's own servers and website's e-commerce system, and of a security virtual terminal. The getaway is usually independent from the merchant account provider.

2. The amount of merchant charges or the discount rate depends on the transaction amount

Each time you accept your customer’s credit card, you will have to pay discount rate. This special type of fee is, in fact, a mixture of various fees, dues and other charges that you need to pay. Interchange fee is the largest of these fees. For the sake of own profit, merchant account providers usually add additional margin to those fees.

The discount rate can be calculated as a percentage of the transaction amount that usually varies from 2% to 5% of the whole transaction amount.

3. Additional fees involved in the process

There are some other fees that you will have to pay, when making money transactions via an online merchant account. These fees are: statement fee, monthly minimum fee, authorization fee, an annual fee, chargeback fee, early termination fee, the customer service fee, and batch fee that can be charged when a merchant settles a terminal. Though these may seem too much, setting an online merchant account and accepting credit cards, you will get more opportunities to make money. Do not limiting yourself by cash and checks and you will attract a greater number of customers and thus increase your income.

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