Before you can accept credit
cards, which is about the only reasonable way to conduct e-commerce, you must have a
merchant account. Merchant accounts give you the power to charge people's credit
cards so each company will have its own requirements before it will "grant" you
an account. Generally there are credit issues involved and a fee schedule.
Usually, the less the stringent the requirements the higher the fees - but this is not a
rule.
In order to be able to compare offers, we suggest you ask about the following:
 Application fee: Who doesn't charge you an application fee for just about anything
you want to do? ;-)
Setup fees:
Setup fees are almost always there, either for equipment,
software, or just because.
Transaction fees:
There will be a set fee per transaction and a discount rate
(a percentage of each sale); they are always there and you need to ask what the rates are
for Discover and AMEX if you plan to accept them as well.
Real time processing gateway
fees:
These apply to companies like Cybercash, Authorize.net,
etc. who allow you to process credit card transactions in "real time".
These fees can be quoted as "instead of" or "on top of" the
transaction fees mentioned above. Check to see which option is better for you, and how
much you will end up paying.
Sometimes it is good to have both "real time" and
manual processing just in case the gateway is down, or you do not process all your orders
via the shopping cart. This way you can still take phone orders and not have to enter them
in the shopping cart if you so prefer.
Monthly minimums:
These are almost always there and are around $20. This
means that even if you do not generate enough sales to hit the monthly minimums they will
take the set minimum anyway. In other words, if you just started last month and had only
$100 worth of sales, you would still pay $20 for credit card processing even though
your "real" fees would add up to less than $5. If you have $100,000 in
sales then the monthly minimum will not apply since you will naturally exceed that $20 in
processing fees.
Statement fees:
Some companies may charge a statement fee. It means
nothing, other than another way for them to extract money from you.
Charge back fee:
Charge back fees are what the credit card processing
company will charge you if your customer disputes charges you placed on his card (always
there).
 IT IS YOUR RESPONSIBILITY TO VERIFY THAT THE CUSTOMER IS REALLY
THE ONE ORDERING YOUR PRODUCTS AND THAT HE RECEIVED THE GOODS. IT IS NOT THE CREDIT
CARD COMPANY'S RESPONSIBILITY EVEN WHEN THEY AUTHORIZE THE TRANSACTION. THEY ARE MERELY
FACILITATORS AND YOU SHOULD REVIEW YOUR CONTRACT TO FAMILIARIZE YOURSELF WITH YOUR
RESPONSIBILITIES BEFORE YOU FIND YOURSELF CAUGHT BY SURPRISE.
We recommend getting your merchant account through
Costco who has negotiated great deals with Nova, the largest Credit Card processor in the
USA. You can get more info at https://costco.novainfo.com/application.asp
or call 1-888-474-0500.
Click here for some ways to protect yourself from
fraudulent orders.
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