Expanding your Online Business with a Merchant Account

Today, consumer attitudes and preferences are increasingly favoring credit cards when paying for their everyday purchases. Expanding your businesses payment options to include credit card processing can improve ROI, increase competitiveness, as well

as increase customer loyalty and satisfaction. Having credit card processing in place is a great decision for pretty much any small business no matter what industry or sector you operate within. The first step in processing credit cards is getting your business set up with a merchant account.

A merchant account allows a business to accept payments made by either debit or credit cards. Since credit card companies rarely directly transfer funds into a business’s bank account, a merchant account provider acts an intermediary between credit card providers and the business.

The initial step that you need to take when getting a merchant account is determine the type that best suits the needs and nature of your business. There are a couple varieties of merchant accounts currently available on the market, all designed towards different types of businesses. For example, there is the retail account, which is the most common type of merchant account in use today. These are geared more towards brick and mortar shops and businesses that operate traditional storefront operations. Another type- internet merchant accounts, allows a business to accept credit card payments through their website via a virtual terminal. There are MTO’s(mail order, telephone order), mobile accounts, wireless accounts and other various niche accounts that round out the rest of the market.

Determining the type that will best fit your business will help you figure out what lenders to apply to as well as what services your store will best benefit from. Remember, that there isn’t a one-size-fits-all approach when it comes to merchant accounts. In making your decision, some factors to take into consideration are the types of products/services your business sells, size of the business, business strength, a provider’s prices and fees, as well as the services they provide. Many of the large merchant account providers offer a range of ancillary products and services including check conversion, fraud protection, and gift & loyalty card solutions.

Prices and fees associated with a merchant account can vary depending on the provider and type. Typically, providers charge a fixed fee for every transaction in addition to taking a percentage. There are also associated setup fees, monthly fees, and some vendors require a monthly minimum amount of orders. For businesses that conduct business on or over the internet (card not present transactions) lenders will apply slightly higher rates and fees. For example, many major merchant account providers like North American Bancard and Pay Pal charge more for “card not present transactions” especially if a business only accepts certain cards.
Below is a list of common fees that providers typically charge:

· Chargeback fees
· Transaction fees
· Discount rate
· Address Verification fee
· Monthly minimum fee
· Statement fee
· Internet Gateway Fee
· Annual fee
· Cancellation fee
· Hidden Fees

Be sure to shop around in order to find the best contract because the costs can vary greatly. While there are a lot of reliable lenders out there offering good deals, there are also plenty looking to take advantage of naïve owners. For more information pertaining to merchant accounts look here: Understanding the basics of a merchant account can help you to select the best option for your business. Take the extra time and conduct proper due diligence when shopping for a merchant account to make the most from your hard-earned dollar.

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