The Real Scoop About Merchant Account Rates and Fees
By Chris West, CDGcommerce
June 21, 2004
About CDGcommerce
CDGcommerce is a registered ISO/MSP for Provident Bank and a provider of leading-edge payment
processing solutions, specializing in Internet and e-commerce merchants. For more information, please visit
their Web site at http://www.cdgcommerce.com or call CDG at (888) 586-3346.
So… you’ve decided to setup your own merchant account. You’ve seen the many different options available
to you on the Internet. Chances are, you have even received some e-mails or postcards with great
promotions and offers.
The big question now becomes – which merchant processor to select? And how can you tell whether the
merchant account proposals you are getting are really a good deal or not?
Many merchants do not fully understand the nuances of merchant account pricing – and so they are often at
a disadvantage when comparing proposals from various providers.
The purpose of this article is to explain common merchant account terminology and describe the various
rates & fees that you should specifically look for and ask about…. before signing off on any merchant
account application or agreement.
Understanding the “hard costs” behind Merchant Accounts
The first thing to understand about merchant account pricing is to get a handle on the costs associated with
a merchant account.
First and foremost, ALL banks and merchant processors have the same core cost – the InterBankExchange
(“Interchange”) costs, dues & assessments from Visa and MasterCard. It is important to note that the very
same Interchange fees apply to all banks and most ISO/MSP’s across the board – regardless of their size or
volume.
On top of these costs, there are network costs. These network costs are the transactional costs that are
incurred to send a credit card transaction request across the bankcard networks to interact with the
cardholder’s issuing bank. These network costs do vary from acquirer to acquirer based upon on the volume
and contract(s) negotiated between the acquirer and the network provider(s).
Beyond the Interchange and network costs, there are other costs such as the payment gateway fees that
are incurred, the “account on file” and other costs that are assessed to merchant providers for maintaining
their merchant account portfolio, BIN sponsorship fees, risk reserves and customer service costs associated
with operating a portfolio of merchant accounts. All of these fees do vary from one processor to another but
are all generally in the same ballpark.

Here are two differant accts with differant fees.We personally use these folks as they are easy to deal with and show ALL tyhe charges and fees before you sign up.

Internet Merchant account
Quantum Gateway

Authorize.Net
Accept credit cards online