Any business that wants to automatically accept credit card payments online must have a merchant account and a link to one of the many payment gateways.
So if you are working on setting yours up, here’s a quick run-down of the costs associated with payment gateways that you need to be aware of.
Your payment gateway provider will usually help you in setting up your account, so they charge you a one-off fee in exchange for their time and effort.
However, this should not be a huge factor in determining which provider to go with. You should be more worried about the ongoing costs involved.
Almost all payment gateways operate using a monthly fee business model, with different tiers so that you pay more if you need more functionality. For example, you pay more if you want a higher level of support, or specific features like auto-billing and fraud detection.
Every payment gateway will charge a “merchant account discount rate”, which is a percentage of each payment that they process for you (between 2% and 5%). It’s also normal for them to charge a small flat fee per transaction.
You should check whether your gateway will accept your currency without charging you, and whether you will incur a fee for any currency conversions.
Some payment gateways will charge you when you refund your customers for any reason. However, the fee is usually higher if the reason for the refund is fraud, technical issues, or identity theft. Since these are rare occurrences you shouldn’t have to worry about it too much.
As we previously mentioned, you will pay a monthly subscription depending on the level of service you’d like to have. You will usually get more security and support than you would on the most basic plan if you pay more.
It’s important to note that this is not about being PCI compliant – all payment gateways are by default required to comply with PCI DSS standards. They’re only charging for additional features.