Ready to take your retail business international?  Many merchants are able to do just that effectively and affordably by simply launching an e-commerce website.  Aside from a user-friendly website and a compatible shopping cart, you’ll need to setup a merchant account in order to accept online payments.

What is a Merchant Account?
Simply put, a merchant account is a specialized bank account extended to merchants that allows them to accept online payments in the form of credit or debit cards.  It also serves as a contractual agreement between the merchant, the bank, and a payment processor for the settlement of credit/debit card transactions.

What Costs are Involved Using  a Merchant Account?
Regardless of the amount of an individual transaction, there are likely fixed fees that apply in order to process the transaction.  These include (but are not limited to):

• Application Fee – Typically a one-time cost, application fees are charged for processing the initial merchant account application and setting it up.  Not all service providers charge an application fee.
• Monthly Fees – Most (if not all) service providers will charge a flat, fixed monthly fee to use their services.
• Annual Fees – In addition, many providers also charge an annual flat fee paid once a year for their services.
• Transaction Fees – Each transaction processed will likely have its own fee, the amount dependent upon the overall transaction amount.
• Cancellation Fee -  A service provider may require a cancellation fee should you choose to terminate the contract prematurely.  Most providers require a contract between one to three years.

What’s the First Step to Set Up a Merchant Account?
Merchant accounts are available through a handful of financial institutions including banks and ISO’s, or independent sales organizations (also commonly known as third-party merchant account providers).   Merchant service providers (which can often be banks and ISO’s as well) also provide merchant accounts and other credit card processing services.

Click here to learn more about merchant accounts and what you need to know to get started!

This entry was posted on Monday, September 14th, 2009 at 2:52 pm and is filed under Business & Careers, E-Commerce. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.