As a business owner, you are always looking for ways to reduce costs and save money. When it comes to accepting credit card payments, you want to find the cheapest merchant services for small businesses. But how do you know which one is the cheapest? And what factors should you consider when choosing a merchant service provider?
In this article, we will take a look at the different merchant service providers and their fees. We will also provide a detailed guide on how to find the cheapest merchant services for small business.
What is a Merchant Service Provider?
A merchant service provider is a company that provides credit card processing services to businesses. They typically charge a monthly fee, plus a per-transaction fee. The monthly fee covers the cost of maintaining the account and providing customer support. The per-transaction fee is a percentage of the total sale, plus a flat fee. For example, if you are charged 2.9% + $0.30 per transaction, and you make a sale for $100, your total fee would be $3.20.
The Different Types of Merchant Service Providers
There are three main types of merchant service providers: banks, independent sales organizations (ISOs), and payment processors. Banks are the most expensive option, but they offer the most features and support. ISOs are typically cheaper than banks, but they offer fewer features. Payment processors are the cheapest option, but they offer the least support.
Payment Processors
Payment processors are the cheapest option, but they offer the least support. They typically charge a per-transaction fee.
Factors to Consider When Choosing a Merchant Service Provider
There are a few factors you should consider when choosing a merchant service provider, such as:
The type of business you have will determine the type of merchant service provider you need. For example, if you have a small business, you will most likely use a payment processor. If you have a medium-sized business, you will most likely use an ISO. If you have a large business, you will most likely use a bank.
The average transaction amount will determine the per-transaction fee you are charged. For example, if you have an average transaction amount of $100, and you are charged 2.9% + $0.30 per transaction, your total fee would be $3.20.
The number of transactions per month will determine the monthly fee you are charged. For example, if you have 100 transactions per month, and you are charged $10 per month, your total fee would be $1,000.
Whether you need a physical terminal will determine whether you need to purchase one. If you do not need a physical terminal, you can use a payment processor. If you need a physical terminal, you will most likely use an ISO.
