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Do I Need a Merchant Account?
Here's a good rule of thumb: If you earn at least $2,500 per month from your website it is more cost effective to have your own merchant account than to go with a third-party processor. (For off-line accounts the break-even point is closer to $1,500.) Example: Sales of $2,500 from 75 transactions - that's the tipping point when a merchant account becomes more cost-effective than a third-party processor like paypal. Online Solutions: Paypal standard 2.9% of $2,500 = $72.50 ----> if $3,000 = $87.00 $0.30 x 75 = $22.50 Total fees $95.00 ----> $109.50 Merchant account 2.25% of $2,500 = $56.25 ----> if $3,000 = $67.50 $0.25 x 75 = $18.75 Gateway = $10 Statement = $10 Total fees $95.00 ---> $106.25 By the examples above, you can see how the more sales you have, the less you pay with your own merchant account. Mobile solutions for use on the road: PayWARE Mobile Gateway - iPhone (swipe only) $14.95/mo (for one phone, add $10 for each addtl) 1.79% x $2500 = $44.75 $2,500 x $0.10 = $25 $6.95/mo PCI compliance Total fees $91.65 (Plus one time set-up fee of $69.95) PAyWARE vs Square: You can see a comparison of cost, based on your average sale amount and your estimated monthly volume and some good info regarding security here: feefighters.com/square-vs-verifone Same example with Square: Square - all swiped 2.75% of $2,500 = $68.75 Total fees $68.75 Square - half swiped 2.75% of $1,250 = $34.38 3.5% of $1,250 = $43.75 $0.15 x 37 = $5.55 Total fees $83.69 |
