 |
As a business owner, you want to succeed. You undoubtedly want
to increase your sales and make more money. The best way to do
this is to offer your customers the ability to pay for
merchandise with their credit cards. Whether you operate your
business in a physical location or online-only, allowing
customers the option of credit card payment is logical. You will
increase sales because of the convenience of the payment options
you offer. The vast majority of shoppers, online and in person,
prefer to pay with their credit cards. Opening a merchant
account is the way to give your customers more payment options.
But it is important that you find out as much as you can about
merchant accounts and merchant account providers.
A merchant account is set up through a bank or an online
merchant account provider for a retail or online organization in
order to accept credit cards as payment from customers. A
merchant account is not a bank account. The merchant account
provider's job is to place the money you earn from credit card
sales into your bank account. It used to be that merchant
accounts were only offered by banks and providers to retail
businesses that were located in a physical location. But with
online shopping gaining popularity over the past several years,
merchant account providers have started providing accounts to
online business owners as well. Even though most banks still do
not provide online merchant accounts due to the constant concern
over credit card fraud, there are an increasing amount of online
merchant account providers that offer services especially to
those merchants that market their products online. Because of
the high number of merchant account providers out there, it is
important that you research all aspects of them, what services
they provide, and especially the costs they impose, so that you
don't lose precious profits.
When looking into merchant accounts and providers, be aware that
there are two types pf payment processing that they will offer.
These are manual and real-time processing. Manual processing
requires that the credit card number be delivered through a
phone transaction, fax transaction, or an online order form. The
order is processed manually by contacting the payment processing
company (through an Internet connection) to verify the credit
card number, or by using a point of sale machine to swipe the
card at the time of purchase. This type of processing is more
secure, less costly, and ideal for a low-volume merchant in a
physical store location. Real-time processing is perfect for
web-based merchants because the credit card is immediately
processed at the time an order is placed. Pending verification
and approval of the credit card, the customer receives
notification (via e-mail) that his or her order is accepted and
fund transfer is approved. This is the less secure of the two
processing options.
There are costs associated with opening and sustaining a
merchant account. Not all of the fees are necessary, and not all
merchant account providers will charge them. One type of cost is
the application fee, which covers the costs of processing your
application, whether you open an account or not. A number of
merchant account providers will waive the fee if you decide to
open an account. And some merchant account providers do not
charge this fee at all. There is often an annual fee associated
with a merchant account as well. Merchant account providers
charge this fee simply for holding an account with them. Another
common fee is the statement fee, a monthly fee that can be as
much as $25 per month, and is supposedly imposed by the account
providers in order to cover their own costs. Yet another fee is
the discount rate, which the merchant account provider earns
from each of your sales, usually between 2 and 4 percent. The
fixed transaction fee, like the discount fee, is also based on
each sale, but the provider takes the same amount regardless of
the cost of the product purchased, usually .20-.30. Usually,
buried in the fine print of your agreement with your provider is
a termination fee. Because some providers require a lengthy
commitment period more than 2 years, this fee applies if you
cancel your account early. There are also various miscellaneous
fees that are levied on your account. Often, these charges are
withdrawn if a customer requests a refund, and wants the amount
credited back to their card. There are many costs associated
with an online merchant account, and it can cut into your
profits. It is important that you evaluate different the
merchant account providers you are interested in so that you
save yourself money down the line. You can also use your current
sales information to guesstimate the costs of your merchant
account.
More than likely, you will have a long relationship with your
merchant account provider. Therefore, you should have the utmost
trust and confidence in them. Your provider should offer various
services that will give you options in making your business
transactions run smoothly. They should be able to accommodate
several brands of credit cards (Visa, Mastercard, Discover,
American Express, etc.), in addition to providing other payment
alternatives, such as PayPal. They should have a record of
impeccable service and reliability. They should also be
first-rate customer service providers. Any problems should be
handled discreetly and quickly. Despite the seeming necessity of
having a merchant account provider, it can make or break your
business with its fees and service. That is why it is important
to know the ins and outs of a merchant account provider, and to
choose one carefully.
About the author:
Learn the essential information for picking the right merchant
account services at Merchant Account Provider
|
