by: Bret Morrison - posted (or last updated): 8th, January 2009

In order to get the lowest merchant accounts rates, you need to present your business or company as one that appears to have least amount of risk. I have worked with the underwriting departments of most of the major merchant account providers. Here's a list of things I think you should consider:

Put together a professional executive summary of your business (3-4 pages)
Get your business bank account before you apply for a merchant account
Get your business stationary, letterheads, business cards, etc.
You want to make your business look as professional as possible and trustworthy
Get as many letters of reference as you can from trade references or business associates
Publish your Web site on the Internet, and make sure all the links work properly
Develop business policies (customer care hours, refunds/returns, office hours, privacy, etc.)
Put all your business policies on your Web site and describe them clearly (e.g. refunds)
Describe on your Web site your shipping methods and fees and any policies
List all you products and services on your Web site clearly - with photos if that helps
Make sure your shopping cart is working properly
Make sure your Web site and shopping cart has SSL security for data transmission online
Make sure you have your tax ID or social security and all business licensing information
Make sure you have your driver's license information and the names of all the main owners
Have your business checking account number, routing number, and bank information ready
The more organized you are the more you are trusted and the lower your rate is going to be

I have always recommended to businesses that they should start with 2 merchant accounts for their business. Here's why:

Although this is more expensive (about $50 more per month), you have the ease of mind that if one suddenly decides to play games with your money (sometime merchant providers suddenly decide to keep 25% of your sales as reserve due to increase of your chargeback rates), then you can use the second back up that you have. If you do not have a backup merchant account, then obtaining a second one later is more difficult because when you apply at a later stage the second provider wants all your current processing and as a result of your high chargeback rates will not give you a good rate for your new merchant account.

Here are some of the cheapest merchant account providers. For more information and additional merchant account providers, you can visit compare merchant accounts.

	Payment Tech	Costco Merchant	Credit Card Processing	Elavon (Nova)	Advanced Merchant
Type of merchant account service	Internet	Internet	Internet	Internet	Internet
Visa/Mastercard Merchant Discount rate	1.97%	1.99%	1.92%	2.1%	1.89%
Visa/Mastercard Mid-qualified rate	2.99%	2.95%	2.64%	2.75%	2.65%
Visa/Mastercard Non-qualified rate	3.19%	3.25%	2.99%	3.19%	2.99%
Transaction fee (per transaction)	$0.20	$0.27	$0.25	$0.12	$0.30
Debit card per transaction fee	$0.20	$0.27	$0.25	$0.20	$0.30
Monthly minimum fee	$25	$25	$25	$25	$15
Monthly statement fee	$15	$10	$7.50	$10	$8
Online or customer support fee	$0	$0	$0	$0	$0
Application fee	$99	$39	$0	$0	v
Annual fee	$0	$0	$0	$0	$0
Cancellation fee	$250	$200	$0	$300	$0
Length of contract	2-years	1-years	3-years	1-years	None
Terminal equipment cost (one time)	Free	Free	Free	Free	$87
Software cost	Free	Free	Free	Free	N/A
Shopping cart cost (if applicable)	Free	Free	Free	Free	N/A
Payment Gateway monthly fee	$50	$50	$50	$50	$15
Payment Gateway per transaction fee	$0.25	$0.25	$0.25	$0.25	$0.20
Wireless fee per month	N/A	N/A	$50	N/A	N/A
Wireless per transaction fee	N/A	N/A	$0.25	N/A	N/A
Address verification fee (AVS)	N/A	N/A	$0.10	N/A	N/A
American Express merchant account rate	3.25%	3.25%	3.25%	3.25%	3.25%
American Express per transaction fee	$0.15	$0.15	$0.15	$0.15	$0.15
American Express application fee	$10	$10	$10	$10	$10
Discover merchant account discount rate	2.65%	2.65%	2.65%	2.65%	2.65%
Discover per transaction fee	$0.15	$0.15	$0.15	$0.15	$0.15
Discover application fee	$10	$10	$10	$10	$10

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