Domain Availability
What Is E-Commerce
Consequently, many banks require a reserve fee when issuing merchant status. Typically, face to face sales have a chargeback rate of 1% of all sales. The potential for chargeback’s is greater when it is an online sale, so the risk to both bank and merchant increases.
To minimize their risks, most banks have stringent requirements that a business must meet to establish eligibility for merchant status. Factors considered include cash reserves, length of time in business, tax returns, credit history, debt load, refund policies, volume of business, cost of item being sold, and other sources of income.
Other associated expenses
The chargeback expense is the first and foremost concern for a merchant hoping to acquire a merchant account. Chargeback’s can result in serious financial loss to the would-be merchant. Also, merchants who encounter too many chargeback’s are at risk of losing their merchant account.
However, there are other charges and expenses to factor into the budget as well. Merchants will need to investigate hidden equipment costs, setup fees, line charges, bank transactions fees, holdbacks, and discount rates, etc. These vary considerably among service providers, so compare, compare, compare!
What do I need to get started?
If you are interested in accepting credit cards online, you'll need to put four simple pieces in place:
- Website presence (backed by good web hosting and design)
- e-commerce tools such as setting up the website sales process, inventory control, and shipping program
- A payment gateway that transmits your customer transactions to an acquiring bank for real-time, secure authorization
- An Internet credit card processing merchant account that allows funds to be deposited into your bank account from your customer's credit cards