Costs Involved in Accepting Credit Cards

Costs involved in merchant accounts vary. If you have decent credit history, your bank can probably give you the best deal. If you go through a broker, you have just added another person who needs to be paid and you may end up paying a higher rate to a bank that does not know you.

The most expensive aspect of taking credit cards is the discount rate. This rate is paid to the bank and depends on your annual sales volume and your average transaction amount. The higher these are, the lower the rate. The discount rate is 1.5% to 5%.

Most banks charge a minimum charge each month if the discount rate is not equal or over the 1.5% to 5%. This fee is paid to the bank and varies from $15 to $30 per month.

Transaction fees are paid to either your bank or gateway. This fee ranges from $0.15 to $0.30 per transaction. Visa and MasterCard have the least expensive transaction fees.

There are banks and brokers who charge an application fee, others do not. The application fee can range from $0 to $500.

Set-up fees are paid to either the bank or broker and can range from $30 to $300.

Some banks and brokers resell or lease the hardware or software gateway. This may include a card swipe machine, PC verification software, or real-time Internet verification systems. Prices may range from $350 to $1000, and are paid to the bank, broker, or gateway.

For real-time credit card authorization on your website, plan on paying your website designer or webmaster for extra time it will take to install the gateway. Rate varies

The Internet gateway company may charge you a monthly processing fee to process your credit card transactions, in addition to the per transaction fee; $30-$50 per month.