How much does a Merchant Account cost ?

Because a Merchant Account is based largely on trust, the cost of your merchant account varies with the risk that the merchant bank feels like they are assuming with you. Because of higher incidence of fraud, higher fees are charged for internet, mail, or phone orders than for face to face transactions. Higher fees are also charged for higher transaction amounts, because the larger the order, the more money is at risk to be lost if fraud occurs. Also, depending on the merchant account, there are a number of fees that are required, including:

Setup Fee - This fee is a one time cost. With the majority of providers this fee starts at $195 and up. Almost all merchant accounts charge this fee, however many integrated solutions allow you to avoid the setup fee.

Discount Rate - This fee is usually a percentage of the transaction amount. Real-time processing rate starts around 2%, and average around 2.35%. The discount rate is always taken off the top along with the transaction fees before any money is deposited into your account.

Transaction Fee - Whenever you process and charge a customer's credit card, there is a transaction fee involved. This is to pay for the network and computers required to make the transaction happen. Most providers charge anywhere from 20 to 50 cents per transaction, and is common to almost all merchant accounts.

Statement Fee - Depending on how you are setup, your bank and/or your payment processor will send you a monthly statement, detailing all the transactions and deposits that have been made into your account during that particular month. This fee varies, but usually ranges about $10.00 a month.

Gateway Fee - This fee pays for the privilage of being able to process credit cards in real-time. Your payment processor may charge a monthly gateway fee which generally ranges from $10 - $30 a month.
Monthly Minimum Fee - The majority of Merchant Providers have a monthly minimum. This is a fee they impose if your credit card charges don't add up to a stated monthly minimum. For example, your monthly minimum is $25 a month. If you only sold $100 worth or products for that particular month, then it would cost you say 2.35% for the credit, 30 cent transaction which equals to $2.65. Now, that is $25 - $2.65 = $22.35, so you would be charged $22.35 for that particular month.