If you want to accept credit cards, you have to work with a merchant account service. A merchant account service charges a certain fee for every credit card transaction. At this point, you might be thinking, “In that case, I’m probably better off without accepting credit cards.” You wouldn’t be the first person to think that. In the US, approximately 45% of small businesses do not accept credit cards. This is a huge disadvantage, because they are missing out on a large chunk of the customer base. Studies show that they could increase their sales by up to 500% or more simply by accepting credit cards.
In the past, some vendors worked with two pricing models: one for cash, and one for cards. In order to offset the merchant account fee, vendors started charging more when payments were made with a credit card. Obviously, this did not sit well with customers, although many find that customers are more tolerant if the price difference is characterized as a “cash discount.”
Don’t imagine that merchant account services have it easy. The competition is fierce, and each company is trying to make a better offer than the next. This is why it’s important to compare several merchant account services and see where you can get the best deal. Some services offer very low fees at the sacrifice of customer service and number of features. Others offset their low fees by charging for tech help, features and every other facet of the business.
The market is truly varied. Once you decide to start accepting credit cards, you will notice that many merchants charge up to $1,200 in preliminary fees! The whole process can take up to two weeks, and then you can expect the merchant to charge you a discount fee of 2.9% or more–perhaps much more if your business is high risk, the average price of your goods and services is high, or the amount of volume your business does is low.
If that sounds like a headache, you might find that Charge.com is the best credit card merchant service for you! Instead of the $1,200 in fees that you’d pay to other merchant account services to get started, with Charge.com you pay $0 in upfront costs. Charge.com also has extremely low rates, with a discount rate starting as low as .25% and a transaction fee starting as low as 15 cents per transaction.