Next on our list of factors to consider is price. You certainly don’t want to pay too much for a retail merchant account. Sure providers have to make a living, but some nickel and dime merchants to death. This is simply unacceptable.

Here are the common rates and fees associated with a retail merchant account:


Fee Type

Application/Setup: $0 – $100
Swipe Terminal
$300 and up
Discount Rate: 1.70% to 1.85%
Transaction Fee: $0.20 to $0.25
Monthly Minimum: $0 – $25/month
Statement Fee: $0 – $15/month
Programming Fee: $0 – $100 (only applies
when moving from one provider to another)
Daily Close-out Fee: $0 – $0.15/day
Chargeback Fee: $5 – $25/per instance
Annual Fee: $0 – $100/year


*A reserve may be required, this is where a merchant account provider will hold onto some of your earnings to cover costs of chargebacks. A reserve usually applies to high risk, high volume and non-US based businesses. A reserve will vary, ask the provider for details.

Here are some questions to ask merchant account providers in regards to pricing:

  • Are your rates introductory or fixed?

Some merchant account providers will try to give you really super rates up front, then as the months go by they’ll slowly increase your processing fees. Make sure rates are fixed and not introductory.

  • Are you willing to put all your rates and fees in writing?

Make sure their paperwork shows ALL rates and fees you will have to pay. They should never keep this information from you, ever.

  • What are your hidden fees?

Many merchant providers have hidden fees, some don’t. Again, make sure those fees not mentioned on their website are shown in their agreement.

  • Do you impose a cancellation fee if I decide to move to another provider?

If the provider is more interested in your business, rather then themselves, they won’t impose a cancellation fee. However, not every company sees it that way. Look over their agreement carefully and ask them (to be on the safe side).

  • Do you require a reserve to be setup?

A reserve is when a provider will hold on to part of your credit card earnings each month, and eventually release them to you later. This should be avoided if at all possible.

Top Notch Customer Service is Paramount

Don’t get carried away by great rates and then forget about customer service. Customer service is king for long-term success and smooth transaction processing. You don’t want to be plagued with busy signals and long hold times. Your time is valuable and downtime will cost you money.

Before signing up with a company, try out their customer service number. Give it a ring and ask them a few questions. Take note of their attitude, do they seem interested in wanting to help you? Are their answers fully-detailed, yet easy to understand?

Some criteria that should be met for superior customer service:

  • 24/7 availability (and yes, even on holidays too, if possible. Definitely, if your business operates 365 days a year.)
  • Hold time 5 minutes or less
  • Friendly, courteous representatives who are knowledgeable
  • Toll-free number

One last note before we move on, don’t get conned by providers who say the reason they charge high rates is because of the superior customer support they give. Sure, that might account for a slight price increase, but don’t let them go overboard. Customer service is important, but shouldn’t cost you hundreds more than with another provider. This type of scam is just so they can fill-up their pockets more.

Requirements for getting a Retail Merchant Account

Now that we have covered the three most important factors in choosing a merchant account provider, let’s look at what you’ll need in order to expedite the process of getting your application approved. Having this information handy will help considerably:

Business checking account (some providers set you up with one)

Copy of a voided check (if you use your own business checking account for credit card funds to be deposited in)

EITHER Articles of incorporation, business license or reseller license. Typically one (not all) of these items are required (A ‘Certificate of Assumed Name’ from your county Register of Deeds office may be all that is required. These only cost around $8.) The purpose of this is to prove you are a legitimate business.
A return or refund policy (Even if your policy is “no refunds”, customers will need to be able to see this somewhere).
Social Security Number of the principal owner(s) (to verify owner information – score isn’t that important)
CONDITIONAL: Bankruptcy Discharge Letter. If you have filed bankruptcy in the past a copy of your Bankruptcy Discharge Letter is needed.

Go To Next Page: Choosing a Credit Card Swipe Terminal

Retail Merchant Accounts & POS Swipe Terminal Guide (page 3 of 6)