A service that enables a business to process credit card transactions. They usually have several fees associated with them, including:

  • Set-Up Fee
  • Monthly Fee - flat rate, or percentage of gross sale
  • Transaction Fee - $0.10 to $0.40 usually
  • Batch/Statement Fees

    Some also require a minimum number of transactions or minimum monetary amount. Some holdback your money for a certain amount of time (2-3 days to a month and a half) before it gets deposited in your account, supposedly in case there's a chargeback (in reality, so they can earn interest, but shh, they don't tell you that).

    Merchant accounts can usually be obtained from banks, but you usually need to have established yourself there, and are usually reserved on home-based businesses. Merchant accounts are considered required in the realm of e-commerce and mail order, and this is reflected in the numerous service providers catering specifically to those businesses. These typically have higher fees because of the perceived risks (such as online fraud and the transient nature of some e-businesses).

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