Selecting a Merchant Account Provider

E-commerce 101: Selecting a Merchant Account Provider

In order to process sales via an online store, you need to either have a merchant account or service like Paypal of Google Checkout. While a store can get by just having a merchant account without a service like Paypal, you can’t get by without a merchant account. You need a merchant account to appear as a professional online store.

There are many different merchant account providers eager to have you as a client. These include, Paymentech and USAePay to name a few. Choosing a merchant account provider isn’t easy. A new merchant will find the array of services, fees and rates mind numbing. Trying to evaluate providers is major chore. With this in mind, I’ve compiled a list of criteria to investigate before selecting a merchant account provider. It is as follows:

1. Rates: The lower the better.
2. Fees (including hidden fees): This is the tricky part. Merchant account providers play a shell game with fees. Here’s a sample list you may encounter:

- AVS Fees
- Per transaction fee,
- Batch fees
- Non - qualified AKA up charges.(this can comprise 30% of a merchants monthly costs). Please be advised that mid-qualified (corporate and government cards) are NOT non-qualified.
- Initiation fee
- Term of contract fee
- Chargeback fees
- Funding time
- Annual fee
- Amex or Discover convenience fee
- Set up fee
- Application fee
- Return fee
- Statement fee

3. Float Time: This is how long the provider will hold your captured sales prior to transferring into your bank account. This can be 3-10 business days.

4. E-commerce Solution Compatibility: Check to see what merchant accounts are compatible with your shopping cart solution. Ask which one(s) they recommend.

5. Online interface tools: Do they offer robust online tools for manual transactions and returns? How about online reporting tools? All are important to the online merchant.

6. Support and Service: What kind of support do they offer? 24x7 phone support? This is important if you run into an payment processing issue, you'll need it fixed pronto (24x7). Are they good at servicing their clients? Online forums are great for checking this (like ours). eCartReviews Merchant Forums

7. Maintenance and upgrades: How do they handle them. Some will knock their processing system offline during business hours. Not good. Make sure they schedule all upgrades and maintenance during the wee hours of the morning.

So once you checkout everything above, you should be in a good position to make a decision a merchant account provider. It’s not easy and can take hours of research but it can save you a lot of money.

There are a few companies that can assist an online merchant in this selection process. They are:

E-Merchants Group


E-Merchant, Inc.

* Thanks to the eCartReviews forum members and E-Merchants Group for assisting with this bog entry!