Are you still depending on cash or check payments to stay afloat in your business? Do your clients annoy when they arrive at the desk and see “cash only” written on the sign?
Accepting credit and debit card payments requires the usage of a merchant account. It’s time to get a merchant account from a merchant account provider if you want to accept credit cards from customers online, in person, or over the phone.
It is critical to pay attention to the deals offered to you when starting a business so that you can ensure you obtain the best bargain possible. Choosing the right provider and ensuring that your application is granted can be more challenging than you think, even if it is a necessary aspect of modern enterprises.
What is a Merchant Account?
A merchant account is a specific form of bank account. It’s a bank account that acts as a link between your bank account and the bank account of the customer.
When a consumer uses a credit or debit card to make a purchase, the money is first sent to a merchant account before being transferred to the merchant’s preferred financial account for withdrawal.
It works behind the scenes to remove money from the customer’s bank and deposit them directly into your company’s checking account during a sale.
During a refund, the process works in the reverse direction. You can start conducting credit card and debit card transactions with your consumers once a payment processor has set up a merchant account for you.
To do so, you’ll almost always require some hardware, which you can get from your credit card processing partner. The payment processor may even provide you with a free credit card reader to get you started.
Four Types of Merchant Account.
Here are the four types of merchant accounts:
1. Telephone Merchant Account.
A phone account is the best solution for you whether your business is online, retail, or mobile and you wish to collect payments over the phone. Some of the other accounts may offer this as an additional feature in NY Biennial Statement Online built-in to your account or may offer it for a small additional fee.
For businesses who advertise or do commerce through adverts or home store networks, this is the best solution.
2. Mobile Account.
A wireless mobile merchant account is the best option for you if your business is on the move, such as when you’re attending trade events or running a food truck. This enables you to accept credit card payments from your smartphone.
In terms of setup, mobile merchant accounts are comparable to Internet merchant accounts. Because it does not have to stay in one location and may be integrated with a smartphone.
The card reader is often relatively inexpensive. Because sales of volume on a mobile merchant account is often substantially lower than on a retail account, transaction fees and processing rates are slightly higher than on traditional accounts.
3. Accounts for Retail Merchants.
A retail merchant account is the best choice for you if you own a retail store with at least one or more stationary locations. Low application and setup* fees are common with these merchant accounts. Grocery and department businesses benefit the most from this sort of merchant account.
Although they generally have low costs, you must meet certain conditions to be eligible for this type of account. Most processors, for example, demand at least 70% of retail purchases to be swiped through the terminal.
The store will need to install at least one, if not more, credit card terminals because these sorts of merchant accounts require physical access to the card. These terminals could be free of charge.
4. Ecommerce Merchant Account.
An Internet merchant account is the best option for you if you offer items or services online but don’t have a physical business. These are unique accounts created exclusively for accepting payments over the internet.
Rather than giving over credit card information over the phone or via postal order, the consumer can enter it into the system via an encrypted page. Transaction costs are often higher because service providers do not profit on terminal equipment.
Merchant accounts and company bank accounts are two distinct but equally important types of accounts. You’ll need both of these account types if you want to take modern forms of payment including credit cards, debit cards, and mobile wallets.
A Must Have Features.
Viewing these standards through the eyes of a merchant services provider can be beneficial. They put time and money into helping you register a merchant account, outfitting you with gear, recommending or installing POS systems, and so on, all while betting on your long-term success.
There are additional things to consider:
- Reconfirm about the security features
- Investigate everything related to technological linkages.
- It is good to go through the entire chargeback management system.
- Take a look at what they have to offer in terms of PCI. Starting out with your compliance system in place will save you a lot of time.
- Check to see if your online software and your storefront merchant account are compatible.
- Remember to read the Terms and Conditions thoroughly! Take notes and have a Google doc with different team members examine it.
- Make sure you have all of your business credentials with you (license, EIN, etc.)
To make an informed, strategic decision, start by identifying your particular business goals and difficulties, and then score each alternative against your qualifications.
Benefits of Merchant Account.
1. Boost Sales.
Customers spend more when given the option of using credit cards rather than cash, according to a number of studies and research conducted over the years.
Indeed, according to Community Merchants USA study, 83 percent of small companies who accept credit cards witnessed an increase in sales in one poll sponsored by Intuit. This increase could have a direct impact on your company’s sales and overall growth.
2. Convenience for Customers.
Simply by allowing customers to make purchases in a variety of ways, a merchant account can lead to satisfied customers. Your customers will love their experience with your business when they can shop how and when they want—with ease—whether it’s with credit or debit cards, online payments through a shopping cart for your services, mobile payments, or recurring billing.
3. Improved Financial Management.
Accepting credit cards and shifting to online payments simplifies the transaction process for your company. Electronic payments, rather than counting cash, will help you stay organized and improve cash flow management and forecasting.
4. Bad Checks Should Be Avoided.
Your business can avoid the inconvenience and costs of failed checks by using merchant account services and accepting electronic payments. Also, it is combined with a comprehensive payment system, your merchant account can enable you to take recurring payments for services that you deliver on a regular basis.
5. Safe and Secure Method.
The financial consequences of a security breach can kill your firm, thus it’s critical to renew your PCI compliance every year. With a merchant account, you may process payments in a secure and safe manner.
Non-compliance is a financial penalty imposed by all acquirers. Payment providers understand what you need to do to stay compliant, and for a little monthly fee, you won’t have to.
The Bottom Line.
It’s not easy to find the ideal merchant services provider for your small business. Though it may be tempting to choose the first one that comes highly recommended or has the best rates.