Merchant Account or Gateway. Who charges what and how does it work?


I'm going to take credit cards over the phone/fax. That means I need some kind of virtual terminal.

I contacted my bank (Bank of America) and got following quote:

  • Set up: $130.00
  • Monthly: $37.99
  • Monthly Minimum: Waived
  • Statement Fee: Waived
  • RATES PER TRANSACTION: 3.1% + .25 (cents)

I was wondering:

  1. What is Bank charging for service and what is First Data charge?
  2. Is there alternative more affordable providers? I may need to process 1-2 payments per month MAX.. Authorize.NET was cheaper on all items but they don't have Merchant Account. Does it mean that BofA charges 3.1% for Merchant account?

Credit Cards Selling

asked Aug 11 '11 at 04:20
276 points

3 Answers


I think First Data would be who is really processing your transactions for BoA.

Check out Fee Fighters to find better rates. I assume that if you are just doing 1-2 transactions they are big and the few questions they ask you will help you find the best choice based on your criteria.

Something like Square is also incredibly easy to sign up for and use with no monthly fees. The rate for swiping cards is relatively high at 2.75% but still even better than BoA. "Card not present" or transactions you manually key in are higher at 3.5% so that might not be worth it for large amounts.

Authorize.NET is not a merchant account but a way to take payments through your website. Is that what you need? A.NET is the most well known but there are alternatives there too.

answered Aug 11 '11 at 09:37
43 points
  • I asked BofA if I can use A.NET and they said YES and than they would charge me $16/mo for account and 5c less per transaction. Adding A.NET charges on top and it will be the same. I'm going to do 1-2 transaction a month and this is MAYBE as I plan to invoice customers. CC is just for initial payment. In this situation I will be much better off without monthly fee. – Katit 13 years ago
  • Thanks again! Square is EXACTLY what I need. My main concern was with setup and monthly fees since I don't know how much I will get. Paying bigger % will make perfect sense in this case. – Katit 13 years ago
  • Good =) I wasn't sure if you are doing a couple huge transactions or what. I use Square too and it is really nice when you are just starting out to just be able to take credit cards without worrying you are losing your meager revenue to a monthly fee. – Praxeologist 13 years ago


for the small number of transactions you are doing you can just use
no monthly fees, no setup cost, just a pct per transaction

answered Aug 11 '11 at 12:38
101 points
  • Can I take CC over the phone using PayPal? – Katit 13 years ago
  • @katit, the same way the enduser pays by creditcard online. you fill out the paypal order form on their behalf. – Bumperbox 13 years ago


I use this company and I'm really happy: We pay a $5 monthly statement fee, a $59/year security fee, then our transaction fees are lower than what is above.

answered Aug 11 '11 at 14:01
Alex Cook
641 points

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