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Why
Retail & Internet Merchant Account Rates
Differ
By:
Jim Conley II, MerchantSeek.com
Many
merchants are confused as to why merchant account
rates, particularly the discount rate and per
transaction fees,
differ between Retail, Internet and Mail
Order/Telephone
Order (MOTO) businesses.
In the retail brick-and-mortar world, orders are
completed
face-to-face. If a customer pays by credit card
they simply
swipe their card through the merchant's credit
card terminal.
This is what is known as "card
present." "Card present"
means that at least 80% of the business' credit
card
transactions are completed face-to-face where the
customer
can slide their card through the merchant's
credit card
terminal. It is generally considered that orders
completed
through this manner are less likely to be
fraudulent, therefore
discount rates and per transaction fees are
lower. Discount
rates for retail businesses fall within the range
of 1.00% to
2.00%, while per transaction fees range from
$0.10 to $0.20.
For Internet and MOTO businesses, credit cards
cannot be
swiped through a credit card terminal. They must
be either
keyed in manually or automatically transacted
using a real-
time credit card processing solution. Since
transactions are
not completed face-to-face (card present) then
the likelihood
of fraudulent orders is considered to be much
higher, so the
rates for these types of businesses are higher.
Discount rates
for Internet and MOTO businesses usually range
from 2.50%
to 3.50% (even higher for non-US businesses), and
per
transaction fees range from $0.20 to $0.50.
For more information about fees and rates
associated with
merchant accounts check out this page:
http://www.merchantseek.com/guide.htm#costs
-----------------------------------------
Jim Conley II is the CEO/Founder of MerchantSeek.
MerchantSeek allows merchants from around the
world to search FREE for a Merchant Account
Provider that best fits their businesses needs
and budget. Visit us at http://www.merchantseek.com/
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