# Merchant Accounts and Their Rates



## tuan (Nov 11, 2006)

Have we had a post comparing all the merchant accounts' rates so we know what we're all paying? I will give info on mine to start. This will also help some of us if we are unhappy with our current merchant account or if you're brand new here shopping for a merchant account.

My merchant account is with Costco
1.99% per transaction + $.27 and $20 monthly fee.


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## flirteegirl (Apr 10, 2007)

I currently use Paypal Pro. They are quite expensive. The fee is 2.2% or more 25 cents per transaction and 30 monthly. I am definitely looking at changing before I officially launch in February.


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## EXTouch (Mar 22, 2007)

Or merchant account that we do all our swiped transactions is 1.69% + .30 per transaction.

For our website, we are using paypal pro. Depending on your monthly sales, it can be 1.9-2.9% + .30 per transaction or .25 per if you're using the merchant rates.


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## RUSSGAIL (Jun 10, 2008)

Hi, Our account is 2.11 per sale, plus 0.10.
A batch fee of 0.25 and a monthly fee of $6.00


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## Teeser (May 14, 2008)

Please mention the name of your merchant account providers. Thanx

I don't know my rates with Authorize.net off hand but I will say they don't seem to have the most updated address verification database. Lots of declined transactions and customers complaining. Looking for a new one...


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## debz1959 (Jul 29, 2007)

We use Wells Fargo for out POS merchant account. We tried to get our online merchant account through them, but they said that we had to have our website up and running so that they could look it over before they could approve our account, so we decided to go with Paypal instead.


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## greyhorsewoman (Jul 19, 2007)

What percentage do you actually pay per month? (I know that will vary each month depending on volume.) No matter what the transacton fee & statement fees are, the bottomline is what does it equate to? There are so many 'extra charges' for taking various reward cards, corporate cards, etc. 

You get that % by taking the total of amount processed for the month by the actual amount you were charged that month. (Charge divided by total processed.) 

We end up paying between 4% to 7%. 4% during our busiest months (sept-dec), 7% slowest (jan-feb) ... we average out at about 5% over the year. That is $1.00 for every $20.00 shirt we sell. 

We have two different merchant accounts, one for online and one for swiping at our events and inspite of slightly different base fees, the percentage is close to the same.

One of my pet peeves are the 'additional' charges for rewards, corporate cards, etc. Why is the merchant 'penalized' for taking these cards? I get absolutely no additional benefit if a customer uses one VISA card over another. If Marriott wants to entice you to use their VISA rewards card, they should (and probably do) pay a premium to the merchant provider for that. Why do we pay again? Makes absolutely no sense to me.


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## Teeser (May 14, 2008)

greyhorsewoman said:


> One of my pet peeves are the 'additional' charges for rewards, corporate cards, etc. Why is the merchant 'penalized' for taking these cards? I get absolutely no additional benefit if a customer uses one VISA card over another. If Marriott wants to entice you to use their VISA rewards card, they should (and probably do) pay a premium to the merchant provider for that. Why do we pay again? Makes absolutely no sense to me.


I hate that too. Another pet peeve is PayPal gets a highly discounted rate for bank transfers and they still charge the merchant 3%. If bank transfers and e-checks had any benefit for me I would definitely push them on the site.


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## lindsayanng (Oct 3, 2008)

The one thing you have to remember about paypal is, even though their rates are high, you do not need to get your own secure gateway with them which can be anywhere from "free" to $600.00 depending on the provider.. Paypal uses its own gateway which is what makes the $30.00 a little better if you dont want to pay a lot out of pocket..

BTW, if ANY of you know they you get a free gateway with certain merchants, PLEASE post that info as well.. i am interested to know


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## stuffnthingz (Oct 1, 2007)

POS: Merchant Card Services. Using my equipment (bought for $75 on ebay) The base fee is 1.98% with flat fee of 8.95/mo. no per transaction fee. And... American Express is a separate service starting at 5.95/mo no additional fees up to a certain amount of sales, then they switch you over to a per transaction charge. We are small scale and will never reach that amount

ONLINE: Free Paypal buttons - 2.9% +.30 per transaction.


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## fender967 (Sep 28, 2007)

Merchant Focus your eCommerce Merchant Account and Authorize.Net payment gateway provider.

This place gives you access to the Authorize.net gateway with free setup. Costs are:

service fee $10/month
gateway fee $15/month
2.09% per transaction +$0.19


Does that sound good?


Also, for anyone that know, what do you have to do to get a merchant account? Is it all included in the process when you sign up at one of these places?


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## lindsayanng (Oct 3, 2008)

fender.. THAT is more expensive than PayPal!! Since you have to pay monthly for your gateway, you are now paying $35.00 a month just to run your merchant services...


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## fender967 (Sep 28, 2007)

How is it $35..?

$15 for gateway
$10 for service


I also found this one, which is $8 for gateway and $10 for service.


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## lindsayanng (Oct 3, 2008)

oh WOW!! i must have been on something when i read that. I swear it said $25 not $15

haha.. Blond moment.. please excuse that


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## fender967 (Sep 28, 2007)

Haha well is $18 / month with Authorize.net good then?


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## Sicboy Worldwide (Dec 12, 2008)

Andrew I really like your site! How is your grand opening going? Who is your merchant Provider and Is it working for you? Best of luck!

Benjamin


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## mrshill (Sep 25, 2008)

Anyone take a look at propay. They might be a better option for you.


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## fender967 (Sep 28, 2007)

Sicboy Worldwide said:


> Andrew I really like your site! How is your grand opening going? Who is your merchant Provider and Is it working for you? Best of luck!
> 
> Benjamin


Thanks!

It was going great but my shopping cart up and stopped working. I'm in the process of redoing the site with a new shopping cart. I have been using Google Checkout, but with the new design I will be moving over to an Authorize.net gateway for credit cards.


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## shersher (Jul 25, 2007)

Has anyone had any problem with chargebacks or fraud? If so how did your companies you deal with for your merchant services handle that, were you completely liable?


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## CardPaymentServ (Feb 19, 2009)

SherSher,

I was asked by some one of my merchant clients to log on to the forums and see if I can help answer some questions. Your my first so i hope this helps. As a profession in the Electronic Payments Industry, I can tell you there is no absolute way of avoiding fraud. However I do suggest the following to help mitigate fraud.

1) Request the CVV or 3 digit code on the back of the card
2) Make sure the Address and Zip match with the processor information
3) Make sure the billing and shipping information match
4) Using the first 6 digits of any card, called the BIN number, you can find out who the card issuing bank is along with a phone number and call them for verification.
5) Use the voice authorization program on large orders
6) Most imporatantly if you feel and order is possibly fraudulant than it most likely is.

Please feel free to email me with any questions.

Ryan Morgan


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## CardPaymentServ (Feb 19, 2009)

Hi All,

I am a Merchant Processor and was asked by a merchant of mine in the T-Shirt biz to come on this forum and answer some questions. I hope you find the following information useful.

The majority of you are referring to pricing given to you buy you merchant and are typically quoting one specific rate. Many of you are on tiered pricing that puts transactions in to percentage buckets, a lot of which are "Mid" and "Non" qualified transactions that have high rates than those that most of you have posted.

The better pricing solution is to have your merchant account priced at "Interchange" (http://http://usa.visa.com/download/merchants/visa-usa-october2008-interchange-rates.pdf), which is the wholesale bank cost to process Visa, MasterCard, and Discover transactions. A processor will typically provide Interchange processing to a merchant in addition to a set discount percentage (i.e. .20%) and a flat transaction amount (i.e. $0.10). 

By using interchange pricing instead of tiered pricing the merchant eliminates the high mark up that processors typically add to "Mid" & "Non" qualified transactions. This pricing model also helps protect against regular processor rate increases.

In regards to Payment Gateways their are all types at all cost. The most common is Authorize.net, and a preferred Auth.net provider typically can provide this to you for $99.00 license fee, $12-15 per month and $0.05 per transaction. While some merchant account providers may offer a free license fee, beware as this cost is typicall recouped in higher percentages, monthly minimums or other hard to find places. Other popular gateways for smaller merchants only have a $10 license fee and $10 monthly fee with a $0.05 per transaction fee.


Reading all the entries though one can tell that each business has its own specific circumstances and needs.

Ryan Morgan


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## fender967 (Sep 28, 2007)

Can you please explain that in a way that someone who doesn't work as a credit processor can understand?

With my Authorize.net gateway I pay $8/month for the gateway and I am charges 2.1% + $0.20 per transaction processed. Is this the same as what you are talking about or is there a better way?


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## CardPaymentServ (Feb 19, 2009)

Hi Fender967,

I hope this helps.

Your base rate is 2.10% + $.20, however there are other rates that you are being assessed and you should look at your monthly statement. You should see that there are multiple types of transactions and are put in to pricing buckets. Some of these buckets are 2.10% and some are much higher.

A better way to have your pricing structured is to get the wholesale pricing from Visa & MasterCard with a small fixed percentange and transaction fee as this elminated the higher margin that processors build into those buckets.

i.e. 

Transaction   tiered cost fixed cost
online debit 2.10% 1.60%
online credit 2.10% 1.85%
reward card 2.50% 1.95%
business card 3.10% 2.30%

as you see there is a smaller disparity on the debit and credit transactions as these are qualified charges however there is a larger disparity on reward and business card transactions as these are considered "Mid" & "Non" qualified transactions, and the place where processors pass on a larger mark up.

Hope this helps but I can certainly understand if I only made it worse.

Ryan Morgan
Sr. Consultant
Card Payment Services


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## fender967 (Sep 28, 2007)

Ah yes, that makes more sense. How easy is it to qualify for that type of processing and what would I do to get started?


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## CardPaymentServ (Feb 19, 2009)

Fender,

if you are happy with you current provider you can just call them. Other wise you are more than welcome to email me at [email protected]


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## tuan (Nov 11, 2006)

RUSSGAIL said:


> Hi, Our account is 2.11 per sale, plus 0.10.
> A batch fee of 0.25 and a monthly fee of $6.00


Hi Russ, who is your merchant provider?


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