Merchant Account

Ecommerce Hosting - How To Choose A Merchant Account
By Stanley Spencer

For a number of e-Businesses, discovering the best way to
accept payments is a frustrating task. As the Internet is an
instant medium, it is highly recommended that a ecommerce
website must accept credit/debit cards and online checks as
modes of payment. In order to accept credit card transactions,
you require setting up a merchant account with a merchant bank.
As soon as you set up a merchant account, an online processor
can provide you with the software or gateway you need to
transact.

Selecting a suitable merchant account is considered to be one
of the most tough business decisions you make as their
existence has almost doubled and are now into more than
hundreds. At the time of choosing a merchant account, you
should be aware of the cost involved in setting up the account.
Refer to the list below and don’t forget to ask about each of
these items before agreeing to an account.

Application Fee
The application fee is compulsory so an agent or bank can
"research" you as a potential customer. Few firms are more
likely to repay this fee if your application is not accepted
while others won't. It is always advisable not to pay an
application fee that will not be refunded in case you are
rejected.

Minimum Account Billing
This fee requires you to do a least amount of business with a
merchant bank. A majority of banks require a monthly minimum of
at least 25 dollars in transaction fees. Anything less than 35
dollars minimum is satisfactory.

Statement Fee
In case there is a considerable minimum-billing need, then
there should be no statement fee. Still, a number of banks
charge this to cover administrative costs. If you are assessed
a statement fee, it shouldn't exceed 10 dollars per month.

Charge back Fee
In case a customer is not satisfied with their purchase, can't
get a refund, or is just looking for something free, you may be
faced with a charge back attempt. Under this, the bank will
return customer’s fund and debit your account for the full
amount. Always make sure to ask about your bank's charge back
policy. Most banks tend to be more loyal to cardholders than
merchants so protect yourself by preventing charge back fees.

Transaction Fee
This fee, which is usually about 2-3 percent of the purchase,
is assessed on every transaction. If a product costs US$100,
the bank would receive US$2-3 for their services. While rates
are relative to the nature of your business, anticipated volume
and your credit history, you should never pay more than 3
percent.

Setup Fee
This covers administrative work necessary to establish your
account. In case you're charged an installation or programming
fee, there shouldn't be a setup fee. There is a considerable
amount of work completed to create merchant accounts, so fees
of US$50-500 should be expected.

At the time of approaching banks or an intermediary about a
merchant account, always keep in mind the following tips:

1. Read the terms, conditions and anticipated charges
carefully. Don't sign anything until your questions are
answered to your satisfaction. Take time to understand exactly
what you are getting and how much you are paying to get it.

2. Do you require a reserve account? It shouldn't be, but if
you are a start-up Internet business, have poor to marginal
credit, anticipate low volumes or run a "risk" business, it may
be required.

3. How long before funds are available to you? Ideally it
should not take more than 72 hours from the time an order or
transaction is processed.

Given below are some of the options available with whom you can
setup your merchant account.

Paypal: With a free PayPal account one can accept credit cards
on your website immediately
Click bank: It offers distribution of digital products and has
an instant affiliate network promoting your business.

North American Bancard: It is a full service payment solution
provider of Credit, Debit, EBT, Check Conversion and Guarantee,
Checks by Phone & Net.

About the Author: Copyright © Active-Venture.com's
(http://www.active-venture.com) ecommerce hosting service. This
article may be reprinted freely online or in print, provided an
active link is made to http://www.active-venture.com

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