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How to Save Money with an Online Merchant Account

If you are new to the business world, you might not know how to save money on an online merchant account. You figure that merchant accounts are cheap anyway, so why bother researching better deals. Well, here is the reason: all of those innocuous fees add up. The merchant that charges 2 percent on all your sales could wind up with $20,000 or more after your business earns its first million.

However, with savvier research, you could drop that figure down to something more reasonable. With that being said, there are three methods you can use for lowering your merchant account fees. They include: using free accounts, purchasing your own terminal and finding companies that offer fixed-rate fees.

Free Merchant Accounts

For entrepreneurs operating online stores, free merchant accounts are not a bad option. With Paypal, Google Checkout and other similar companies, there are no upfront fees of any kind, and merchant accounts such as Paypal have a reputable name so you know you can trust them.

Instead, a nominal fee gets deducted each time a purchase is made. Such fees are usually calculated based on your sales volume. If you exceed $100,000, you can get rates under 2 percent.

If your sales volume is extremely low, you might want to start off with a downgraded account. Paypal is an example, as they do not charge any fees on their Personal accounts. In exchange, consumers can only hold $500. Should they exceed this amount, they must upgrade to a Premier or Business account, where the processing fees are accessed.

Purchasing Your Own Terminal

Free merchant accounts have a downside; they cannot accommodate offline purchases. To do this, you must find more versatile merchants that can handle both online and offline sales. The online part will get handled with HTML code, but the offline portion will require a terminal. Some merchants will give you a “free” terminal, but you will have to compensate by paying higher fees.

Others will lease you a machine. Of course, neither of these options will save you money. What will cut down your expenses is the outright purchase of a machine. For a few hundred dollars, you can eliminate the leasing portion of your merchant account. In addition, if you decide to switch to a different merchant, you won’t have to give back the machine, so ensure you pick one that will be compatible with other merchants just in case.

Fixed-Rate Fees

Many merchant accounts offer bundled rates. In other words, your rate lowers the more you sell. Unfortunately, beginning businesses may not be able to clear $1 million or even $100,000 each year. In turn, they end up paying higher fees despite making less money. Merchants with fixed-rates do not do this, as their fees are the same regardless of your sales volume. So it’s best to shop around to see if you can find the best deal.

Here are some sites that offer a comparison of merchant accounts, which makes it easier for you to pick a merchant to suit your business needs. Merchant Account Info, Credit Card Processing Review, Compare UK Merchant Accounts


My name is Nisha Sharma. I represent a site called CompareLogbookLoans.co.uk. I love to write, especially about travel, finance and offer business advice. Feel free to visit our site for more information about logbook loans.

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