Merchants unsure about which type of merchant account would be cheaper have another tool to use when deciding between a traditional merchant account, a Square Inc. mobile account and an online PayPal account.

TransFS LLC, a Chicago-based merchant-services provider directory, launched a free online Square calculator July 14 that computes monthly account fees for each type of account. Square is a mobile-phone point-of-sale acceptance service that operates on Apple Inc.’s iPhone (see story). 

The company launched its PayPal account calculator in June.

To use either calculator, a merchant adjusts a sliding scale to enter the average transaction size and the total monthly card volume. The monthly fees display at the top of the page.

For example, a merchant with a $15 average transaction size and $5,000 in monthly volume would pay $187.50 a month for a Square account and $190.56 for traditional merchant account. A PayPal account for the same merchant would cost $225 per month, according to the TransFS calculator.

All of the variables, such as transaction fees and terminal costs, are displayed on the website.

“A lot of merchants don’t know what a merchant account costs,” Sean Harper, TransFS co-founder and CEO, tells PaymentsSource. Merchants also may compare Square or PayPal costs against their current account, he says.

No merchant information is collected to use either TransFS calculator, Harper says.

TransFS launched last year as a comparison service for merchants (see story). It uses a “reverse auction” system to help merchants find processing services.

With reverse auctions, merchants submit to TransFS the percentages of orders they receive in person, through mail orders, by telephone and online, and a current processing statement or their monthly sales volume and average transaction size if not already accepting payment cards. TransFS then analyzes the data trends in transaction types and rates paid for the transactions, creating a merchant profile on which merchant-service providers then bid. The merchant chooses the winner from among the bidders.

TransFS is working with 10 merchant-services companies and is adding about one new one per month, Harper says.

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