When you’re doing business, the last thing you want to think about is how much you’re spending. Merchant services fees are something that every merchant needs to know about, even if they don’t have a ton of money to spend up front. If you’re just starting out as an entrepreneur and aren’t sure what these fees are all about, or how much they cost—or even if they’re worth it—then this article is for you! In it, we’ll cover everything from how merchants can negotiate their rates to what types of merchant services exist in the first place:
What Type of Merchant Services Do You Need?
You may be wondering what type of merchant services you need for your business. There are many different types of merchant services available, so it’s important to know the differences between them.
- Merchant Account: A merchant account is a bank account that allows you to accept credit card payments online or over the phone. This can be done through an app on your smartphone or tablet, or by using a device like an iPad stand at checkout in your physical store location. Once you’ve set up a merchant account with us, we’ll provide all of the equipment necessary so that customers can pay their bills securely through our website using their own credit cards or debit cards (with no fees!).
- Gateway: A gateway connects two systems together–in this case it connects our website with yours so that customers can purchase goods from within an online shopping cart system such as Shopify or BigCommerce etc., which will then process payments via our gateway service provider rather than directly through them which would incur additional fees associated with each transaction processed through this method instead of simply having one flat rate fee per month regardless if there were 100 orders placed during said period.”
How Much Should You Expect to Pay?
You’ll have to check with your merchant account provider to find out exactly how much you’ll pay for each type of transaction. The fees vary by merchant, industry and payment processor. Here are some examples:
- Credit card processing fees range from 1% to 3% of the purchase amount. The average credit card processing fee is 2%.
- Debit card processing fees range from $0.10 – $0.20 per transaction, depending on the number of transactions processed in a month (some companies charge by batch). The average debit card processing fee is about $0.25 per transaction for smaller businesses that process less than 10,000 debit cards per month; larger businesses may pay more because they process more than 30 million transactions per year!
- American Express charges higher interchange rates than Visa or MasterCard–and some business owners don’t realize this until after they sign up with an Amex-only processor and see their statements come through at higher rates than expected!
How Do You Apply for Merchant Services?
To apply for a merchant account, you can do so online or over the phone. If you prefer to apply in person, there are several ways of doing this too:
- Visit your local branch.
- Call the customer service number on your bank’s website and ask them to send an application form by mail or email (if they don’t have an application form available online).
How to Negotiate Merchant Services
If you’re looking for a way to save money on your merchant services fees, there are a few things you can do.
- Negotiate contract terms. When negotiating with your provider, ask about their cancellation policies and whether there are any fees associated with canceling the service early on. You may also want to consider asking about additional services that could help reduce costs further–for example, if your business does a lot of overseas transactions or has high-volume sales volume during peak seasons like Black Friday/Cyber Monday promotions.
- Negotiate monthly fees and transaction rates based on volume and risk level (i.e., high-risk businesses will pay more). This is especially important when comparing providers because different companies have different ways of pricing their products based on risk factors such as industry type (e-commerce vs brick-and-mortar), geographic location or even credit history! For example: one company might charge $1 per swipe while another charges $0.25 per swipe but only accepts Visa cards so there’s less fraud exposure overall.”
The Best Types of Merchant Services to Choose From
As a business owner, it’s important to know the different types of merchant services available and what each one can do for your business. You’ll also want to consider how your customers will benefit from the different options.
- Traditional Merchant Services: These are the most common type of payment processing service and they include traditional credit card transactions as well as debit card transactions. They typically come with lower fees than other options because they don’t require any additional equipment or software on your end (you just need an internet connection). However, this means that you won’t be able to accept Apple Pay or Google Wallet payments through these types of providers–but there are other ways around that!
- Virtual Terminal Merchant Services: Virtual terminals allow merchants who don’t have their own POS systems at their businesses but still want the ability to process credit cards without having them physically present at all times; instead they use remote access software where users can log into their accounts remotely via laptop or desktop computer via secure web connection without having to carry around any extra devices like iPads or smartphones which would otherwise be needed if using traditional merchant services instead! This makes things easier since there is no longer any need for employees/managers working behind bars like bartenders do when serving drinks; now anyone can take care of sales duties anywhere within reachable distance regardless whether inside home office building space limits boundaries only during normal work hours – thus giving freedom back into personal lives again after months long confinement inside cramped cubicles due.
Merchant services are a necessity for any business, but they can be confusing to understand. The good news is that there are many types of merchant services available and each one comes with different merchant services fees and features. You can choose the one that works best for your business and keep costs down by negotiating with your provider about what type of fees you’ll pay before signing up for any plan.