Small Business Merchant Payments: Merchant Accounts for Small Businesses

Running a small business has its pluses and minuses. On the plus side, small business owners often feel more “in control” of their business than large business owners. But the reason for that feeling can be painfully obvious: a small business’ low revenue simplifies its financial management. For many new businesses, low revenue complicates everyday business in ways that large businesses can’t contemplate. For example, choosing the right merchant account can be a critical financial decision. For most new businesses, this means critical in terms of reaching customers and making low transaction payments.

Choosing the right accounts

Some merchant businesses approach an MSP (merchant service provider) to choose the “best” account for their needs. However, many businesses require two or more accounts to sell effectively and match their customers’ payment preferences. Consider the following accounts and how they help businesses:

Retail processing account. A retail account allows businesses to accept debit/credit payments using a card terminal. These accounts are intended for businesses that sell in store, and may be the only accounts necessary for businesses that sell only in store.

Wireless account. A wireless account is for businesses that sell at changing or temporary locations. With a wireless account, businesses use a wireless card terminal or turn a mobile communication device into a payment terminal using a transition device.

Internet processing account. An Internet processing account allows businesses to reach customers worldwide, spurring dynamic profits. An Internet payment gateway lets businesses accept debit, credit, and check payments online.

Mail/Telephone order account. Allowing customers to pay by mail or telephone reaches a buying segment that prefers mail payment for its familiarity and telephone payment for its service options. For businesses that wish to maximize their revenue, a mail/telephone order account is part of the equation.

Minimizing account fees

For many small businesses, account fees ultimately determine which merchant accounts—and also which MSP—they choose. Because fees vary by MSP, finding the lowest small business merchant payments requires research. The following fee scales indicate what to look for:

Discount rate. A discount rate is a collection of charges, fees, and dues a merchant pays for conducting debit/credit card transactions. Paid as a percentage of each transaction, discount rates that start under 2% for retail processing accounts, under 2% for wireless accounts, under 3% for Internet accounts, and under 3% for mail order/telephone accounts are currently considered favorable.

Transaction fee. Paid as a flat fee upon each transaction, transaction fees starting at under $.30 for retail processing, wireless, Internet, and mail order/telephone accounts is currently considered favorable.

Monthly statement fee. A flat fee charged for the preparation of a monthly service statement, a monthly statement fee of roughly $10 is currently considered favorable.


Monthly minimum fee. A monthly minimum fee is charged when a business doesn’t meet its monthly minimum for transaction fees. The monthly minimum fee is determined by subtracting the actual fees from the minimum level required. Currently, a monthly minimum of roughly $5 for retail processing, wireless, Internet, and mail order/telephone accounts is considered favorable.

AVP Solutions has over 25 years experience in Small Business Merchant Accounts. Whether your business is small and growing or plans to stay small, contact us today about the best merchant accounts for small businesses.