Choosing The Right Merchant Account Provider

Choosing The Right Merchant Account Provider

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.

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