With merchant account providers raising processing rates and charging annual fees for security (PCI DSS compliance) it makes sense  for small business website owners to review merchant account providers carefully before choosing or changing a provider for online credit card processing.

I’ve had an account with the same merchant account provider for several years, but recently the rates have been creeping up, in many cases to over 4% per transaction.  Add the monthly fees and the new annual PCI DSS compliance fees together and the account is  costing about $500 a year before a sale is even made.  That’s alot for a small business to pay in account fees.   Combine the increasingly high rates with the surly customer service and it has become clear to me that it’s time to review other choices.

The criteria for my business may differ than other small businesses, but here is what I looked for when reviewing  my options:

1. Monthly fees
2. Transaction fees (percentage and flat fee per transaction)
3. Contract commitment – avoid early termination fees
4. Compatibility with existing website and accounting systems
5. What are the company’s  procedures for compliance with PCI DSS? What are the costs and the procedures?
6. What online method of payment is most desired by your website customers?

There are many merchant account providers to choose from, among the choices, Paypal and Google Checkout are becoming increasingly attractive to small business websites.  They are PCI DSS compliant, their monthly costs are minimal or free and their transaction fees are competitive for small business transactions. A contract is usually not required and  they are easily integrated into most shopping carts and websites. 

I’ve set up many sites with Paypal but I had not tried Google checkout yet, so in the spirit of testing the product, I removed the encrypted client payment form that I used with my old merchant account on my website and replaced it with Google checkout.  Set-up and installation was simple.  Client approval is yet to be determined.

My perception of Google checkout vs. Paypal is that it’s a newer product and fewer people are familiar with it.  Therefore, people may be less receptive to it or more receptive depending on their experiences with Paypal and with the Google brand.   I’ve used it a few times when making purchases on websites and I found the purchasing process to be simple and user-friendly. 

But that’s just my perception.  I’m currently running a poll on LinkedIn to find out what other people prefer. Please take a minute to take the poll.

In addition to testing Google Checkout, I’m also testing the Intuit merchant services.  Their rates were lower than my old account  and their interface with QuickBooks makes processing transactions and accounting for them a breeze.  I’m currently just using this account for offline payments as I haven’t set up a payment form on my website yet for use with this provider.   But I expect if I’m happy with their product I will set up a payment form on my site to use with this account. 

I’m interested in hearing about your experiences with merchant account providers — from a merchant point of view and customer point of view.