It really depends on what country you are in. If you are wanting a "true merchant account", you will also need an electronic payment gateway (LinkPoint / YourPay, PayFlow, Authorize.net / Cybersource, Yahoo!®).
I could not tell what country you are in, so I'll talk a little about United States merchant accounts. I won't go too much into IPSP (Internet Payment Service Providers) / 3PP (Third Party Processors) like (some versions of) Paypal or 2CO (2CO is a bit different - 2CO is basically set up to resell your products or services).
If you are in the United States, chances are the merchant account provider is going to charge you anywhere from $10.00 - $25.00 a month. They might call this a statement fee, a customer service fee, etc - but it is a fee, call it what you want.
Some of them will impose a monthly minimim, let's say $15.00. And let's say your discount rate is 2.19%. Now if you sell $700.00 that month, that would be about $15.33 and your monthly minimum is met. You should not need to worry about this for this month. However, if you sell $450.00 that month, that is about $9.85, so the merchant account provider would charge you $5.15 to meet your monthly minimum requirement. And some merchant account providers will take their portion at the time of the sale and give you the rest or you can also ask them to just take it at the end of the month. There is also a transaction fee assessed as well. This is usually between $.15 to $.40 a transaction depending on your number of transactions.
Now on to the electronic payment gateway. These will usually be anywhere from $10.00 - $60.00 a month. These gateways might also assess a transaction fee from $.10 - $.30 or maybe they might charge you a percentage as well (i.e. Yahoo!®). And some gateways will just be a monthly fee, and will not charge you a transaction fee. And some gateways will give you a certain number of transactions free each month - i.e. PayFlow Pro gives you 1,000 I beleive before assessing a per transaction charge).
Now if you are in the United States, doing more than $1,000 a month - consider a merchant account and not an IPSP. The reason being, you will get your money usually anywhere from 24-72 hours after the transaction ACHed right into your bank account. You don't need to wait a week or so or contact them to get your money. This will save you some valuable time. Of course, some people don't think time is valuable and a IPSP might be for you. An IPSP might also be for you if you are worried about potential chargebacks - let them vet the transaction for you.
Electronic Payment Gateways: These are the virtual connectivity between your website and the transaction processor (First Data, Nova, etc). The gateway will usually offer an API so you can process the transaction on your secure website, keep the checkout process consistent. Of course, you can also use the electronic payment gateway's secure web page as well.
The gateway will connect to the transaction processor. If the transaction processor has a relationship with the issuing bank and acquiring bank, the transaction processor will approve / deny the transaction without sending it to the card association (Visa, MasterCard, American Express, etc). You might remember that First Data was doing this and Visa was suing First Data because First Data was approving / denying the transaction without sending it to Visa, thus cutting Visa out of a piece of the transaction. This was finally settled though since it was to no one's advantage.
There are basically seven steps:
- Authorization
- Merchant Balancing
- Capture
- Clearing
- Interchange
- Surcharge
- Merchant ACH
Now of course if you are not in the United States, some of this will not apply to you and probably written in vain, however I am hoping that it will help some United States' merchants.
Which will lead me to one final thing - when picking a United States Merchant Account Provider - you should see if the company is a registered ISO / MSP and with what bank. Or if the website is an agent website, you should see what company the agent is registered with and once again, what bank the agent / ISO / MSP is associated with. If you do not see this, close the browser window immediately. Merchant account providers and agents in the United States have to follow strict rules set by Visa / MasterCard.
Hopefully this will help a few members - my fingers need a break from typing.
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