Finding the right Merchant Gateway
If you're a small business owner, and you want to sell stuff online, odds are you're going to need a merchant gateway. A merchant gateway is a payment network that accepts and processes credit cards. Once the merchant gateway has processed the credit card, the funds are deposited into your bank account.
What fees are commonly associated with a merchant gateway you ask? There are several, so bear with me while I explain them...:
Setup fee - Most merchant gateways have some sort of setup/activation fee. Setup/Activation fees can rage from $0 to thousands depending on your transaction volume.
Monthly minimum - Many merchant gateways have a monthly minimum fee they charge you. This monthly minimum in some cases is waived if you meet minimum requirements for the number of transactions you process in a month.
The Rate - This is what most people evaluate when they are looking for a merchant gateway provider. The rate is actually composed of a few pieces. When you charge someone, typically a merchant gateway will charge you a percentage of the sale (anywhere from 1% - 3.5% and often they will charge you a flat rate as part of the sale.
Example: 2.3% + 0.15 per transaction.
When looking for a merchant gateway, keep the following in mind:
- Do they offer great customer service?
- Do they have anti-fraud tools to cover you from accidentally taking a stolen card
- Do they offer a competitive rate based on your business?
- Do they offer an online merchant gateway?
(You'll want a merchant account that includes a "gateway") - Do they offer technical support, and if so, what are their hours of support?
- Does support cost extra?
- How much is their monthly minimum?
- Do they have many customers in your same industry?
(Often if they don't, you might not get the best rate) - Do they offer an API so you can hook the transactions to outside systems?
I have worked with a few merchant providers over the years, and I highly recommend the following:
Bluepay.com
Payleap.com
Squareup.com (For mobile payments)
Both Bluepay and Payleap offer very low monthly minimums and moderate rates, great for a business just getting started. Squareup is a mobile payment processor that allows you to take payments right from your cell phone. If you attend a lot of trade shows and sell things there, I highly recommend Squareup.
A close third in the mobile payment arena is a device that was created by Intuit (The same company that makes quickbooks) called:
So do your due diligence, as there are thousands of merchant gateway providers out there. If you follow the above guidelines, you'll choose a good one in no time.