Merchant Accounts
Simply explained, a merchant account is the way to accept credit cards as a form of payment for products and/or services on your website, online store (like Ebay), or brick and mortar retail establishment. That’s it; so any stressing over the need for credit card services for your ecommerce or other business has just come to a screeching halt. Long gone are the days of major corporations and retailers being the only ones who could set up such accounts, so there are no excuses. All you and your business require now is a gateway to get you set up with the right type of service for your needs.
If you’re setting up a website that will benefit from credit card processing, you might need a shopping cart if your website offers such products and services. Most companies who offer merchant accounts don’t have the necessary software to place a shopping cart on your site, but the better services will set you in the right direction by having links to websites with such the necessary products to get you up and running. Other than that, you’ll just need to know a few things about a merchant account.
First, just about every merchant account service grants you the ability to accept both Visa and MasterCard, with the option to take Discover and/or American Express. All monies accepted will be deposited into your personal or business checking or savings account, usually by days end. Fees do apply to all services including a low percentage rate and nominal fee per credit card accepted by your business. Discover and American Express fees are higher than Visa and MasterCard.
If you’re an online retailer as well as a brick and mortar one, you’ll need a different type of account for each. Ecommerce accounts are used for Internet website processing and Card Swipe for the physical store. The primary difference lies in the 3 or 4 digit code on the card that is needed when the physical card isn’t present to check the signature. This security feature is for the benefit of your customers as well as the protection of you and your business.
After choosing the right service for you and your business, you’ll need to submit an online application. When received, your service will send you a Cardholder Electronic Data Storage compliance form that you will need to initial/sign before faxing or sending in and a page with your schedule of fees, Merchant ID Number and the directions for proceeding. You will also need to send in a voided check or deposit slip to the account you wish to have your funds deposited into. If you process transactions before your service receives your voided check/deposit slip, any accumulated funds will be held until the necessary paperwork has been received.
For all those who have recently begun a business, the words merchant account, merchant account provider, credit card machine, online payment processing, etc will pop up sooner or later. The Internet is brimming with advice on this subject and you are certain to see the comparison between merchant accounts and other payment methods.
This article will explain the basics of what's truly involved in taking credit cards and the required steps to getting a merchant account - online, offline or otherwise...
What is an Online Merchant Account?
A merchant account is an account obtained from a reputable financial institution like a bank through which you are allowed to accept credit card payments.
The merchant account can also be acquired from specialized financial institutions called "merchant account providers". These financial institutions work with banks to supply unique features that would not be available otherwise.
As soon as you are able to accept payments via credit card, you will see an instant increase in sales, simply because there is now a more expedient payment option for your clients. Since many customer these days prefer to pay with plastic, sales transactions are quicker, and there's decreased risk and less "work" in terms of parting customers and their money.
There are various advantages that can greatly increase your profits once you open your own merchant account: (i) customers will impulse buy more readily, (ii) real time transaction processing, (iii) the resulting flexibility attracts additional customers to finish sales without holdup, and so on. Shortly, you will discover that your business profits (and word of mouth marketing) will will begin improving - simply by being able to accept credit cards - and service more clients...
To set up a merchant account, some things need to take place: The bank or financial institution will conduct a basic investigation into your business' credentials. They will look into your credit history, your business plan, your organization's financial stability (whether you can pay the fees - fixed and per transaction - imposed by the merchant account, etc). After the bank and/or financial institution is confident that the business is able to sustain a merchant account, they will establish the ability of your company to take payments by credit card.
This is the reason any company who owns a merchant account is more trustworthy to a customer. It is well known by consumers that the company who has a merchant account has undergone the rudimentary inspections required by a bank or financial institution and were deemed acceptable. It's similar to having a "stamp of approval", other than the fact that it simplifies the sale on various levels.
You need to be conscious that the majority of merchant accounts require minimum monthly fees to be paid that will be charged regardless of whether you process sales or not that generated fees that month. It's advisable to analyze the fees and features of several merchant accounts providers prior to deciding which one you will choose. And no matter what you do, be certain to read all of the terms and conditions of each potential merchant provider prior to signing on the dotted line...
Another benefit that comes with a merchant account is a comprehensive monthly statement of transactions. This statement will provide you with the credit card number of your customers. This will make it simple for you to match charge-backs or returns, and it will give you precise monthly and yearly sales figures and reports. (Hopefully, you won't be getting any charge-backs...)
Other than the fact that - assisted by the right merchant account - you are able to obtain superior service at the lowest possible costs (the profits skyrocket after your sales volume increases), you can also simplify and automate your company when you're selling online.
And that's what's called working smarter, not "harder". Being able to accept credit cards - and knowing the steps to getting a merchant account - makes it so much easier to see a real level of success with your business...
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