In order to figure out which type of merchant account is best for your business, and which rates and fees will matter the most, you must create a profile your business. How your business accepts credit cards, seasonality, processing volume, average ticket size, and other factors will all play a role in figuring out which type of merchant account is best for your business and which rates and fees are most important.

You can profile your business using the following questions as a guide. Each question is followed by a description that outlines what the question is asking and why it's important in determining the best type of merchant account or rate and fee package for your business. Don't worry if you aren't sure of the answers to any of the questions below.

How will I be processing credit card transactions?
Envision how you see a transaction taking place. If you will be accepting credit cards via your website you will need an Internet merchant account or a mail order merchant account. If you will be accepting credit cards for your retail store you will want to check out retail merchant accounts. Perhaps your business will require some degree of portability in order to process credit card transactions making a wireless merchant account, touchtone telephone merchant account, or store and forward merchant account possible options. If your business is in the lodging industry you will want to research lodging merchant accounts. And lastly, any supermarkets should take a look at grocery merchant accounts.

Does my business have seasonal swings?
Any business that has significant seasonal swings will be especially affected by monthly fees because of seasonal downtime. If your business is dormant for certain months out of the year you should try to have monthly fees such as the statement fee and monthly minimum fee lowered. You may need to give a little in other areas like the discount rate and transaction fee in order to make this happen, but it will save you money in the long run. This scenario is often true for businesses that are affected by the weather such as craft fair businesses or ski resorts.

The term average ticket refers to the average amount or dollar volume of a sale. If you have a high average ticket you should do your best to find the lowest discount rate possible. Work with providers to have them lower the discount rate on your merchant account even if they must raise the transaction fee to compensate. If your business has a smaller average ticket you should to work to lower the transaction fee, even it if means you will need to sacrifice a higher discount rate. The basis for this rule is simple mathematics. The following example illustrates both scenarios and shows how rates and fees can be manipulated to decrease processing charges substantially.

Example:
The following business has an average ticket of $500. While reviewing quotes the business owner was faced with a number of options. Each quote they received was competitive, but because of the business's high average ticket, one quote was a better fit.

Merchant Account A:
Discount Rate: 1.90%
Transaction Fee: $0.05
Average Charge Per Transaction: $9.55 (500 X 0.0190 + 0.05 = 9.55)

Merchant Account B:
Discount Rate: 1.59%
Transaction Fee: $0.35
Average Charge Per Transaction: $8.30 (500 X 0.0159 + 0.35 = 8.30)

Merchant account B saves the business $1.25 per transaction because the percentage charged over the high $500 average ticket carries more weight than the flat per transaction fee. Now let's use the same example for a business with an average ticket of $10 and you'll see that the opposite is true.

Merchant Account A:
Discount Rate: 1.90%
Transaction Fee: $0.05
Average Charge Per Transaction: $0.24 (10 X 0.0190 + 0.05 = 0.24)

Merchant Account B:
Discount Rate: 1.59%
Transaction Fee: $0.35
Average Charge Per Transaction: $0.51 (500 X 0.0159 + 0.35 = 0.509)
The percentage discount charge over a $10 average ticket is hardly noticeable. It's the per transaction fee that carries the most weight for a business with a lower average ticket.

What will my processing volume be?
The term processing volume refers to the dollar amount of Visa and MasterCard transactions that you expect to process in a monthly period. If you expect to process a higher volume, monthly fees are of the less importance to your business. Higher volume businesses should be most concerned with obtaining the lowest transaction and discount fees possible. Monthly fees such as the statement fee and monthly minimum will not be much of a factor over gross charges.

Will my business benefit from the ability to accept credit cards?
This is probably the most important and most often overlooked business profile question. All too often business owners fail to compare the cost of credit card processing to the expected increase in sales it will generate in order to determine if credit card processing will benefit their business. Of course, retail stores and e-commerce website have very little choice, but smaller businesses and professional niche business types need to give this question some serious thought. Be sure to look at what your competition is doing before you make a final decision on whether or not to accept credit cards. If the competition is accepting credit cards, you may have no choice but to accept cards as well.

Overall, the ability a business's ability to accept credit cards is most often beneficial. Business owners cringe at the cost involved, but the extra business card acceptance generates often negates these fees with profit to spare.

Does my business require multiple merchant accounts? 
If your business will be processing credit card transactions in a number of different ways (card-present and card-not-present), you should research the costs and benefits of obtaining multiple merchant accounts. This is most often necessary for retail businesses that also have an online presence. In this situation the business would require an Internet merchant account to process their online sales and a retail merchant account to process their in-store transactions. When looking into multiple merchant accounts for your business you will often be able to work with provider to have monthly fees lowered or waived on one of the accounts.