Read about the latest trends in Internet Merchant Accounts
Australian Internet Merchant Account Information
For a professional experience for your customers when paying for goods at a site it is best to avoid free merchant accounts such as paymate. Looking at the rates they seem very attractive, but if you are serious about a professional look, they are best avoided because:and
If you want to trade on the internet or accept card not present transactions (CNP) and want to look professional, you will have to apply to the banks for an Internet Merchant Account or MOTO account (Mail Order/ Telephone Order).
A quick look at the below information reveals that it doesn't look very competitive. In fact given that the MSF (Merchant Service Fee Percentage charged for every transaction) alone will generate huge income for the bank, it seems that the accounts really should be free and that banks are double dipping. This is not surprising. Unfortunately, because Visa and Mastercard themselves charge an MSF to the bank it is very unlikely that a bank will deviate from this successful formula.
We can only dream for some competition from another card provider to scrap MSF and go transaction based. This is similar to the current EFTPOS scheme which charges a merchant roughly 30c per transaction regardless of the transaction amount. You will probably agree that it costs Visa/MC and the Bank no more to process a $1 transaction then a $1000 transaction, but based on a 1.5% MSF the difference to the bank is 1.5c to $15 MSF - hardly fair.
New Merchant Account Fees?
One new and particularly vicious ways that banks are screwing the merchants is so called "tier" rates depending on your card. Yep, you guessed it - that gold card you got for the free points and travel insurance is not free at all. This is really a scam as you - the customer have already paid hundreds of dollars for the card already - only for the merchant to be whacked again. So, be prepared if you are applying for an account with CBA and NAB.
Another insidious way that banks again are raking in the money is to deny part of the MSF on refunds. Yep - guess again - when your customer asks for a refund, maybe the product is faulty etc. you will not get back all the MSF only part. Therefore you lose twice, however the biggest offender is American Express which denies the full MSF. So on a sale of $1000 with a 3% MSF @ $30 - if your customer asks for a refund, you lose the $30 plus the original sale.
So now what to do? Armed with this information and some preliminary work to get you prepared you can now shop around the banking institutions. We have done the hard work for you and listed the rates (as of 2009) for you.
This site has some interesting facts about payment gateways.
The following banks support 3rd party providers.