What To Look For In An Internet Merchant Account Provider

Welcome to the exciting world of ecommerce!  It’s a wonderful place where unidentified clients and vendors meet together to exchange goods, services, and of course, currency.  Unless you don’t have a merchant internet account; then you can’t exchange currency online.  For those with small businesses, particularly those with internet store fronts, getting a merchant account setup online couldn’t be easier.  But before you march on over to the computer and sign up for a merchant account with the first entry in your Google search results, take some time to do a little research first.

Find a Reputable Vendor

The ecommerce boom has turned a lot of individuals into small business owners.  It has changed the way many consumers make purchases, making shopping nearly effortless.  It has also changed the way dishonest people take advantage of others.  There were reportedly 500,000 ecommerce websites in the United States in February 2012.  With that many websites aimed at selling goods or services to shoppers there has to be a way for the business owners to collect money online, and it comes in the form of a merchant internet account.

Before choosing a vendor to do business with, however, take some time to read independent customer reviews, contact the Better Business Bureau, and conduct a thorough investigation before settling on a merchant internet account provider.  As ecommerce websites have cropped up so have fictitious vendors that would have you believe they can provide merchant services for your company.  Some businesses have the misfortune of finding out too late just who they were really dealing with.  Signing up for an account with PayPal, Google, or another reputable company will ensure that you won’t get taken by a clan of swindling hoodlums.

Complete the Application

No, a merchant account is not the same as a bank account.  There are some similarities that exist between a business checking account and a merchant account, but in reality they are two separate animals entirely.  A merchant account requires an application and underwriting, and not all applicants are fortunate enough to get approved the first time around.  It’s not uncommon for banks and other financial institutions to conduct a pretty extensive background check in order to determine the cash position of your company.  This enables them to decide whether or not to open a merchant account in the name of your business.  Some vendors require a fee just to submit the application and get started with the background investigation.  If your company does get approved there may also be fees associated with underwriting.

To remain competitive in the industry, however, there are many vendors that offer free applications and underwriting.  Don’t mistake this as a fraudulent company trying to buy its way into your business.  It’s not that that can’t happen, but there are plenty of honest vendors out there that waive the application and underwriting fees so they can compete with other vendors that are in the same business.

There are several items on the application that are standard questions.  It may ask you to produce the following information:

•             Company name

•             Tax ID number

•             Principle owner’s name

•             Mailing address

•             Phone number

•             The business entity type (S-Corp, LLC, etc.)

•             Website address

•             Email addresses of officers

•             An estimate of how many credit card transactions you plan on processing each month

•             A monthly gross sales estimate

•             Bank account and routing number

As you complete the application online, be certain that the website is secured.  The address bar should have an image of a padlock inside it and the address should begin with “https://.”

Investigate the Fees

Even the best merchant internet account will have fees associated with it.  It’s simply an operating expense that comes with running an ecommerce business.  Vendors that provide merchant services generate income by charging customers to use their service.  It’s pretty standard to have fees that are percentage based as well as some flat-fees that occur on a monthly basis.  Some of the more common fees include:

•             Discount rate.  Each transaction that you process through your merchant internet account will be counted as a sale.  A discount rate is when the merchant account provider takes a percentage of each sale that is processed.  The percentage rate can fluctuate from one merchant service provider to the next, but usually they are pretty competitive.

•             Transaction fee.  In addition to taking a percentage of each sale that is processed through your online merchant account, the best merchant internet account provider will also charge a transaction fee.  This is usually a flat-rate fee.

•             Statement fee.  Statement fees are also flat rate fees.  They are traditionally fees that the merchant services provider charges each month for the creation of statements.  Many merchant account statements are now available in electronic format, but usually having a PDF formatted document rather than a paper statement doesn’t change the fact that a flat fee will be charged to your account each month.

•             Monthly minimum fee.  If you experience a lower than normal sales month it can impact how much you will be spending in your merchant account.  A monthly minimum fee is charged if your sales don’t go above a certain dollar amount.  The fee may be slightly different from one vendor to the next.

•             Account set-up fee.  When you get a merchant account there is usually a one-time fee to get everything organized and ready for you to start accepting payments online.  While it’s not standard protocol, the best merchant internet account providers may have people who respond to your negotiation skills and might reduce or wave the set-up fee altogether.

•             Annual fee.  You can expect this fee to come payable each year on the anniversary of the date you first opened your merchant account.  It’s a fee that merchant service providers charge to have an account open and active.


As you organize the various elements of your internet business, make sure you don’t skimp on the time you take to research merchant accounts.  Look for a vendor that has a good reputation, see if you can score a waived application fee, and read all the fine print when you’re investigating processing fees.  Taking the time to conduct a thorough investigation before signing up with a merchant account provider will help you feel confident that you’ve made a good decision.

At quotehunt - card machine we make sure businesses are connected to the best providers for their merchant account needs.