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Choosing the right merchant account provider is one of the most important choices business owners face when considering e-commerce options. It is not a decision to be taken lightly.

The wrong decision could result in a loss of profits and a lengthy contract that must be honored, even after a second account provider has been chosen as a replacement. Unfortunately, there are many business owners who find themselves paying for two services, because of this very reason.

There are several helpful tips to take into consideration when researching merchant account providers. These tips are dependent on the size and type of business that is interested in providing e-commerce availability to their customers.

Small business owners, who are working with limited funds, may want to initially consider the use of an online provider such as PayPal or 2checkout to process their credit card payments.

Because of the fees associated with a more formal merchant account provider, many small business owners who process up to $1000 per month in credit card payments find that these third party payment processors work out quite well.

Business owners who process more than $1000 per month in credit card payments, may want to consider other vendors. When doing so, one of the most important things to look into is each vendor’s discount rate and per transaction fee schedule.

The discount rate refers to the actual percentage of the sale that the merchant account provider will keep. There is normally a separate rate for ‘swiped’ and ‘non-swiped’ transactions. These fees vary from vendor to vendor.

There is also a fee charged for every processed transaction. Again, these fees vary but can be anywhere from 10 cents to 99 cents per sale.

Business owners who process smaller credit card payments of under $25, might want to consider choosing a vendor offering a higher discount rate and lower per transaction fee, as this will probably be a money saver.

Other things to consider when looking for the right merchant account provider include: monthly statement fees, gateway fees, annual membership fees, equipment rental fees, batch fees, cancellation fees and contract length.

Merchant account services have come a long way over the past few years. Business owners will find that many of these vendors offer lower fees, short-term or even no contract options, and customizable account features.

In conclusion, the large number of e-commerce service providers is actually a good thing. Vendors must stay competitive, in an effort to attract new clients. This competition often results in lower fees and better overall service.

By taking the time to thoroughly research several merchant account providers, it is typically easier to make a final decision on the right one to utilize. Comparing the pros and cons of each vendor is a good way to begin this research.