Merchant Account
A merchant account is an account with a bank that allows you to process credit cards. This bank account is established with a payment processor for the settlement of credit card transactions, with the money being transferred to your standard business account in real-time or during various points in a 24 hour period. Any merchant who wants to take credit card orders must establish a merchant account, which is a crucial part of ecommerce. Internet merchants need a “Card Not Present Merchant Account.”

Discount Rate
A Discount rate is a percentage rate charged by the bank for processing a merchant’s transaction. This rate is usually determined by the type of business and/or how the credit card is processed. Retail based transactions (card present) will always have a lower discount rate than mail, phone, or Internet transactions (card absent).A percentage that is paid to the credit card company on each transaction. If a customer makes a credit card purchase worth $10.00 and your discount rate is 2.40%, you pay $0.24 for the $10 sale. A competitive discount rate is roughly 2.40%.

Monthly Processing Minimum
Monthly Processing Minimum is the minimum amount you must pay each month for your credit card processing. A competitive monthly minimum is approx $30. The monthly minimum does not apply to monthly fees or transaction fees. For instance, if you sell $1000 in goods over one month, your total Discount Rate (see explanation above) would be $23.90. This amount does not meet the $30 minimum so the credit card company will round your charge up to $30. If the discount rate and transaction fees exceed $30, then you have met the Monthly Processing Minimum and the fee does not apply.

Gateway Processor
A gateway processor makes for communication between the merchant’s website and the bank’s computer networks, acting as an interface between the two. It charges your customers’ credit cards via the web and sends the funds to your merchant account.

Real-Time Processing
Real-time credit card processing is designed to respond to a credit card purchase within a pre-determined time. Real-time processing of credit card charging authorizes and charges the customer’s credit card at the time of purchase.

Offline Processing
This method of credit card processing allows a business to collect a customer’s credit card information, and then process the charge at a later time.

Secure Socket Layer (SSL)
SSL is a Secure Socket Layer protocol developed by Netscape Communications Corporation for securing data transmission in commercial transactions on the Internet, designed to ensure cardholder information is safe during the ordering process.

Statement Fee
The statement fee is charged by the bank each month to process and send you your statement. Statement fees usually cost between $10.00-$15.00/month.

Transaction Fee
Transaction fees usually fall between $0.20 and $1 (US). It is the amount charged for each credit card transaction, collected by the merchant account provider. This amount is in addition to the discount rate.