Introduction to Merchant Account Quotes
Get a merchant account quote and understand the costs associated with your payment processing. Merchant account costs and fees should be transparent and custom-made for your business. A processor will gather documents to make your quote as accurate as possible.
A merchant account quote is a useful tool for comparing different payment processors. There are a few types of fees within online payment processing, and it helps to compare how each bank will charge you for the service. Quotes should be straightforward and fast.
How much does a merchant account cost?
The cost of a merchant account depends on your business and industry. For a standard merchant account, the average pricing is around 2.5% of the total charge and $0.10 per transaction. As your company grows, you can reduce this cost and lower your fees.
A merchant account is free, it's the fees associated with transactions that a business pays for. As long as you meet monthly minimums, you shouldn't pay any extra for your payment processing outside of the transaction rates. For example, gateway fees are considered a transaction cost.
Alternatively, if you are looking for a high risk merchant account, or a credit repair merchant account, you'll pay a premium for your processing fees. This is because banks take on added liability when it comes to boarding your account. If you're not sure if your business qualifies a look at What Is A High Risk Industry for details about how they are categorized.
How much should I pay for merchant services?
In general, you should pay as little as possible for merchant services, negotiating the rate around 2.5% of the total credit card payments you receive. ACH or debit card fees should be even lower. Be sure to compare low cost merchant processing companies to find the best rates available.
You may pay more for additional merchant services beyond your ecommerce merchant account. They can include services like a payment gateway which is an online integration that secures transactions and payments. If you're a retail shop, or looking for a retail merchant account, you'll want a physical terminal. This is where customers slide, insert, or tap their card to make payments in-person.
Can I create my own merchant account?
To create your own merchant account you'll first need to register with an acquiring bank. Afterward, select which payment gateway you prefer. Next you'll have to obtain PCI and DSS certification. Lastly, create an internal software to manage payments or types of transactions.
Or, go one step further and have the ability to open other merchant accounts. To get this level of autonomy, create your own "bin" which is a shared network of accounts. Also called a payfac, it describes an ISO that boards accounts internally, and shares risk among many businesses.
Is a merchant account free?
A merchant account is free if you find a payment processor that doesn't charge you for transactions. This is rare, but if you have few charges it may be practical. More likely, they may only charge you what's called interchange pass-through pricing where you pay for the exact cost billed per transaction.
Another way you get closer to a free merchant account is to only accept debit cards. They represent lower risk from a banking standpoint, and more importantly, federal regulations cap off these fees. The most a bank can charge for interchange is 0.05% and $0.21 per transaction.
Free Merchant Account
A free merchant account is an option for businesses who are just starting up and don't want to pay high processing fees. For example, low-risk processors like Square will only charge you a percentage of each transaction plus a small fee every time someone makes a purchase.
Which is to say a free merchant account with no fees is difficult to come by. If you want to have a no fee merchant account, you'll need to find a trusted banking partner who will set one up as a favor. In reality, even credit card companies charge fees so if you want to accept that form of payment you'll have to incur some charges for the service.