There are no free merchant accounts. Every merchant account provider will charge you some sort of a monthly fee, which can range from $10 to $25, maybe even more. Most will not charge application or setup fees, but there still are some who do.

For your eBay store, you will need a payment gateway, which will integrate with your shopping cart and will transmit the transaction information to your processing bank. You should get a gateway set up for free, however some providers still charge for that too. Then there is a monthly gateway fee, which again will range between $10 and $25 or more.

I am not aware of any providers who don’t charge monthly account and gateway fees.

The good news is that your processing rates will be lower than PayPal’s and you will have more control over your account. Processing fees vary widely, however you should be able to get an offer for no more than 2.19% + $0.25 per transaction.

In short, if you are not making many credit card sales, a merchant account is probably not for you, as it has a certain amount of fixed monthly cost. At the same time, the processing cost per transaction is lower, so if you are processing enough card payments, it is no doubt the better way to go. Plus, unlike PayPal, your merchant account provider will not freeze your account every time a customer attempts to make a payment from a “Hot spot” with a different IP address from his home.

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