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Getting the Right Merchant Account Provider
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By Mark Woodcock
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.
Learn the essential information for picking the right merchant account services. Merchant Account Provider
Article Source: http://EzineArticles.com/?expert=Mark_Woodcock
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