Merchant Accounts

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1) How do I set up a merchant account for a website?
I’m creating a website to sell some products and was wondering how I got about setting up a merchant account that will accept all credit cards. Do I need a business license? Also, do I need a separate tax I.D. for this particular merchant account or can I use my ssn? Thanks for any help.

To setup a merchant account you will need your business and personal information.  Gather up the owners personal information including social security #’s, home addresses, date of birth, and drivers license.  As for the business you will typically need a federal tax ID numer if applicable or if applying as a sole prop have your business license/dba.  You will also need a voided check with the business information on it or do a bank verification with the company you are setting up with.

 

2) How much does it cost to get a merchant account for online order, and which do you recommend?
I don’t know very much about merchant account, but I’m a retailer and do business selling products online. Which merchant account do you recommend, how much is the monthly fee and which do you recommend in addition?

Great question. The first thing you may want to do is get familiar with the industry. It is a very tricky one and most companies are not going to explain their fees and usually hide many of them in fine print. For this reason stay away from contracts or termination fees! Should there be any surprises or you dislike their customer service etc. you can leave without penalty. What your monthly fees will be will vary a bit from processor to processor but you will have to pay a gateway fee and a monthly statement fee. The payment gateway is the technology that encrypts your credit card data once it is retrieved from your shopping cart. Unless you have a really lousy credit score you should avoid paypal as their rates tend to be higher 3-4% and they can and do tend to hold your funds up with little explanation at times and have no real customer service to speak of.
General range for a merchant account plus a payment gateway (you need both) is roughly $10-$30 per month.   Your per transaction fee typically falls in the 25 to 30 cents range and your credit card discount fee for online payments typically runs in the 2 to 2.5% range.These are very rough numbers and can vary based on your sales volume, products sold, credit score and numerous other factors.   It should be a reasonable range estimate for you if you are considering.

 

3) Is a business bank account the same as a merchant account?
Is a business bank account the same as a merchant account? If not, what’s the difference?

No.  A business bank account is account the business has at a bank.  It is usually a checking account but could be a savings account.
A merchant account is an account the business has that allows them to process credit cards payments.  This can be through their normal bank or via a third party like Elavon (www.elavon.com) or paypal.

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