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Begining: The biggest up-front cost will be for the terminal, the machine used to swipe cards, for card-present transactions.  Basic terminals go for between $150 and $300 typically, terminals with printers are $200 to $600, and wireless terminals can run from $600 to $1000. You may want to lease a terminal instead. Leases can be as little as runs $35/month, although prices can vary depending on the sophistication of the terminal and the length of the lease.
Terminals are not required for card-absent transactions. Instead, you can get software to verify transactions from your PC for as little as $150. Some providers even support card verification directly over the phone.
For more information about credit card terminals, read Credit Card Terminals Buyer’s Guide.
My advice is to be careful with application fees. Some credit card payment systems providers charge application fees of up to $200, and they may be non-refundable, even if your business is turned down for an account. You are able also have to pay setup or account activation fees. Make sure you understand exactly what you will be paying for before you sign anything.

Periodic costs: The primary fee on credit card payment systems is the discount rate, a small percentage the credit card payment systems provider charges on each transaction.
Banks and larger credit card payment systems providers will base this fee on criteria including: your company’s evaluated risk, average sales ticket, transaction type, and total charge volume. Because of the difference in risk, most credit card payment systems providers have two different rates, one for card-present transactions and one for MOTO (mail order/telephone order, also includes Internet transactions) or card-absent transactions. Currently, card-present transactions usually carry a discount rate of 1.5% to 2%, while card-absent transactions are at 2.2% to 3.0%. Some companies set a monthly minimum fee ranging from $20 to $35 per month, so if you do a low volume of credit-card transactions, be sure to ask about this.
Another processing fee charged by the merchant bank is the per transaction fee. The per transaction fee is generally $0.20 to $0.30 for card-present transactions and $0.30 to $0.50 for card-absent transactions. There is also a fee to cover the cost of issuing monthly credit card transaction summaries, usually around $10.
Need still more costs?:In addition to these basic fees, there are an astonishing number of fees that credit card payment systems providers can charge: annual fees, programming fees, Internet processing fees, shipping and handling, American Express setup fee, customer support fees, etc. Essentially, these are arbitrary-jack-up-the-bill fees. Make sure you have a complete understanding of all the charges you will incur before making your decision.

This entry was posted on Saturday, June 10th, 2006 at 6:35 am and is filed under Main. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.