For many merchants wanting to get setup to simply accept credit cards, the pricing component may be the most important part of the credit card merchant account. The merchant account has a few different pricing structures associated with the discount rate. The discount minute rates are a portion charged against the gross quantity of volume processed and usually ranges from 1.5% to 3.5% depending on the kind of account and the type of charge card being charged.

There are two main types of pricing schemes related to the discount rate. The greater common continues to be the 3-tiered approach where there is a "qualified" discount rate, a "mid-qualified" rate, along with a "non-qualified" rate. With each level, the more "qualified" a transaction is, the low the rate. Stuff that affect the rate include whether the credit card is physically present during the time of the transaction (card present account) versus a merchant account where the credit card isn't present as in the case of the internet merchant or catalog shopping / phone order.

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The type of card may also influence the discount rate. When customers make use of a charge card that's associated with a banking account (a Visa or MasterCard branded check-card), this can typically cost less than a charge card which has a rewards system mounted on it or a corporate credit card.

The other type of pricing structure is known as the "interchange plus" costs. Interchange is best regarded as the wholesale rate that one bank charges another bank for processing these transactions. The merchant pays this rate as a "retail" rate which is the wholesale rate plus usually about .2-.3%. This can be a very effective method to compare one merchant account costs against another merchant account pricing structure. The main help to this type of pricing is that you can make sure your cards are being processed at the lowest possible rate above interchange versus the "bucket" or tiered approach where if it won't qualify at one level, its automatically costing the higher level.

Having your merchant account setup is not too hard, but making sure you're getting competitive pricing could be a challenge if you don't understand what you're looking at. Most local banks will give you a standard rate that will cost the average merchant an additional $500 to $1000 per year in surplus discount fees. Running via a solid merchant account comparison can be achieved effectively and help give you the best possible pricing.