Retail vs. Online Merchant Accounts

Though every business has its own unique features, when it comes to setting up merchant accounts, there are two important categories to distinguish retail vs online merchant accounts between prior to starting your search. Retail businesses have much different needs than online merchants, so before sending out your information to any merchant service provider, it is important to know what those differences are. Like any other aspect of your business, knowing the different details is important to proper planning and preparation.

What Is the Common Thread?

Despite the differences between a physical retail location and an online merchant, there are some common threads between merchant accounts. These commonalities include:

  • Payment gateways: Though the gateway types vary based on the kind of business you are running, both retail and online merchants need payment gateways to actually accept the credit card payments.
  • Monthly Fees: Every merchant account that you apply for is going to have monthly fees associated with it. No matter what type of industry you are involved in, the best advice here is to look for a company that offers the lowest possible monthly fees.
  • Batch Fees: Both retail and online businesses are responsible for paying batch fees on their transactions.
  • Transaction Fees: Beyond the monthly fees, every transaction that you make is going to have somewhere between 1% and 4% of the total transaction as a fee. Once again, as a business owner you should be looking to get the lowest rates possible.


Of course, there are also some differences to observe regarding retail vs online merchant accounts, so make sure you understand them fully.

What Does Retail Need vs Online Merchant Accounts?

In addition to the aspects discussed above, retail businesses require terminal rentals so that they can actually swipe credit cards and accept transactions. These terminal rentals mean an additional fee, but overall they also carry lower transaction fees, which usually means you will be paying less for the service. Beyond just having terminals in place, you still must have other ways to accept payments, which are included in the payment gateways you will need to set up.

What Can Online Merchants Expect?

For many online companies, one concern is having your business classified as high risk when it comes to retail vs online merchant accounts. Since all of your transaction will be card not present transactions, there is a much higher likelihood that this will occur than for retail establishments. Should your business fall into this classification, it is important to realize that you may have additional fees to cover as well as higher transaction and monthly fees. On the other hand, you will not have to pay for any terminal rentals.

Get the Services You Need

Setting up merchant accounts can seem like an intimidating task, but once you have the information sent for your application you can get moving forward. Regardless of whether you are opening a retail establishment or forming an online merchant account, the first step is always to send in all of the necessary information.

If you have further questions when it comes to choosing between retail vs online merchant accounts, please reach out to a representative at Transparent today to find out more.