If you look at the most frequently searched for phrases surrounding merchant accounts, you soon discover literally thousands of people are looking for “free merchant accounts”.

You might even have found this page as a result of doing such a search in the search engines.

If that’s so, I’ve got both good and bad news for you.

You have to appreciate that being a provider of merchant accounts is a complicated and expensive business. There’s lots of competition out there, a lot of fraud you could become liable for and unrivalled technology required.

It’s not a cheap exercise and after all they aren’t in business to lose money. No, they’re in business to make a profit.

What this means is that for you to accept credit cards on the Internet it is going to cost you in some way. There really is no such thing as a “free merchant account”.

So the bad news is that they always get you somehow. The good news is that there are a few merchant accounts you can set up for free or low cost, though not many.

Processing your application, setting up your unique login details, testing your forms, ensuring you’re sticking to all the rules and answering enquiries from clients is all very expensive. After setup things get a lot cheaper for both parties but you must accept the fact that most providers of merchant accounts will expect you to pay your way during this time-intensive introductory period.

So as to whether or not there is such a things as “free merchant accounts” depends on your point of view and it’s important to study the fee structures carefully to understand the matter better.

Without exception all merchant account providers charge a fee every time you accept a credit card payment on your website.

Either a percentage of the value of the sale, or a standard fixed charge plus a percentage of the sale ontop. (Incidentally, beware of these two instances and do your maths right. In some circumstances the second option can still work out more cost-effective for you.

It’s fair to say that in terms of fee structures you’ll encounter either:

A high setup fee ($100-$400) then a low per-transaction fee, or…

A low or free setup ($0-$50) then a much higher per-transaction fee

What’s best for you depends on your circumstances. You see, you can sign up for option 2 with very little capital outlay, but pay a large amount (up to 20%) of each sale to the merchant account provider.

Or you can shell out a few hundred dollars to start with, then make far more profit per sale than option 2.

So as I said at the beginning. In answer to those wondering if there are free merchant accounts – the answer is yes and no.