How do I Choose the Best Small Business Merchant Account?

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  • Written By: Tiffany Manley
  • Edited By: A. Joseph
  • Last Modified Date: 31 January 2020
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A small business merchant account is used to give the merchant the ability to accept credit cards and debit cards as payment. Many options are available for small business owners to choose from, but these options vary greatly when it comes to what they offer and at what price. A few items you should consider when shopping for a small business merchant account are application fees, per-transaction fees, monthly fees, initial and recurring costs of equipment, monthly minimum or maximum amounts allowed for processing and customer service.

One of the first fees you might encounter when obtaining a small business merchant account is an application fee. Some merchant account service providers charge an application fee when a business applies to use their services. Many times, this fee is very low, such as less than $100 US Dollars, but this is not always the case. Reading through fine print and the listing of other fees and then comparing them to those of other companies will ensure that a nonexistent application fee is not being made up for by higher fees in other areas or higher equipment costs.


In order to make a profit, merchant account service providers charge monthly and yearly fees on a small business merchant account. These fees might include a per-transaction fee, monthly charges to use merchant account services, an annual fee and monthly statement fees. How much is charged for these fees varies from company to company, so you should evaluate several companies to determine which fees you are willing to pay and how much. Also keep in mind that it is possible to negotiate fees with many merchant account companies.

One cost that is often overlooked when looking for a small business merchant account is the cost of equipment. The type of equipment needed varies from business to business and can be as simple as a universal serial bus (USB) card-swiping machine or as intricate as a wirelessly connected multi-machine point-of-sale terminal system. When setting up a small business merchant account, you might be presented with the option to rent your equipment or to purchase it upfront. In order to ensure that an economically sound decision is being made, you should consider your long-term cost when deciding whether to rent the equipment or purchase it.

Some merchant account service providers require businesses to process a certain amount of money in transactions each month. There might be minimum and maximum amounts or one or the other. You should read all fine print to ensure that you will fall within these guidelines. If you do not, there generally are fees assessed each month that the amounts are not met.

Although the cost to the business is an important factor when deciding which small business merchant account provider to use, great customer service also is something that should be considered. The amount spent on slightly higher fees can far outweigh the time spent working with customer service representatives who are less than helpful. Be sure to check reputations of different providers, and speak with other business owners for recommendations.



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