What Is a Merchant Account and What Should I Look for in One?
With more than $300 billion in sales processed online via credit cards last year and financial institutions indicating a surge in mobile and online payments that could reach amounts of $500 billion in 2015, it is merely impossible for any online business to ignore online payments. Every online business that sells online products or services needs a mechanism to process money transactions from a customer's credit card to the business account. For this, a business needs a merchant account that ensures a smooth online transaction of funds.
In simple words, a merchant account enables an online business to accept credit card payments. These payments are received from the customer into a businesses bank account (or merchant account) through an arrangement with a clearing house or a bank. It ensures that all online credit card transactions that are approved through an online authorization company are credited to your bank account without any hassle.
Such accounts make it possible for customers to use credit cards for payments of their products or services at online business sites. Today, they are considered the most cost effective and simplest way of handling online fund transactions using credit cards. While some businesses still use other methods to enable online money transfer from credit cards, they are often complex, time consuming and more expensive compared to merchant accounts. Additionally, there are hundreds of companies that provide merchant accounts to online businesses. Due to this tough competition, you can easily find a competitive, inexpensive and quality merchant account provider if you know what to look for.
What to Look For?
There are plenty of options available when it comes to choosing a merchant account for your business. While setting up such an account is quite easy, finding one that is the right choice for your business, especially when it comes to small merchants, is where the challenge lies. Use the following list as a guideline of key points that you need to look for in a merchant provider before making a final decision.
Are there any hidden charges involved?
One of the most common complaints about merchant account providers is hidden charges. Besides monthly fees, most charge cancellation fees, technical support fees, upgrade fees, annual fees and many more that you often don't find in an initial contract. The equation is simple, merchant account providers want to earn more money while you want to spend less. So read the terms, contact customer support and inquire about any hidden charges in detail before making a decision. Compare the subscription or per transaction fees of different providers as well to better judge what the cheapest option available is.
Learn about the company from online review sites.
If you are looking for quality services, a great idea is to see what is being said by their past customers. With a huge number of dedicated websites made for review postings of merchant account providers, it may take only a few minutes to learn what past or current clients have to say about the company. Because of feedback and review sites, It is now nearly impossible for a merchant account provider to get away with having bad quality of services. Review sites can definitely help you in narrowing down your options.
Is Support effective?
Dealing with online money transactions will usually always have some problems from time to time. Issues with the payment gateway, a wrong transaction, and incorrectly taking someone else's money are just a few examples. In these cases, you need to ask for the immediate help of the tech and/or customer support of your merchant account provider. It is critical to partner with a provider that offers quick, responsive, knowledgeable, friendly and efficient customer and tech support. You may also like to work with a merchant account provider that offers 24/7 customer support, if your business requires this.
In addition to these basic tips, you can also look into the technology used, the experience of the company in the industry, security offered against frauds, approval rating and setup time. For small businesses, companies with low start-up costs and low monthly fees are usually quite attractive while large businesses often prefer merchant account providers who offer efficient 24/7 customer service, security features, fast processing speeds and advanced technology. In any case, you need to do detailed research about different merchant account providers before making a final decision.
In simple words, a merchant account enables an online business to accept credit card payments. These payments are received from the customer into a businesses bank account (or merchant account) through an arrangement with a clearing house or a bank. It ensures that all online credit card transactions that are approved through an online authorization company are credited to your bank account without any hassle.
Such accounts make it possible for customers to use credit cards for payments of their products or services at online business sites. Today, they are considered the most cost effective and simplest way of handling online fund transactions using credit cards. While some businesses still use other methods to enable online money transfer from credit cards, they are often complex, time consuming and more expensive compared to merchant accounts. Additionally, there are hundreds of companies that provide merchant accounts to online businesses. Due to this tough competition, you can easily find a competitive, inexpensive and quality merchant account provider if you know what to look for.
What to Look For?
There are plenty of options available when it comes to choosing a merchant account for your business. While setting up such an account is quite easy, finding one that is the right choice for your business, especially when it comes to small merchants, is where the challenge lies. Use the following list as a guideline of key points that you need to look for in a merchant provider before making a final decision.
Are there any hidden charges involved?
One of the most common complaints about merchant account providers is hidden charges. Besides monthly fees, most charge cancellation fees, technical support fees, upgrade fees, annual fees and many more that you often don't find in an initial contract. The equation is simple, merchant account providers want to earn more money while you want to spend less. So read the terms, contact customer support and inquire about any hidden charges in detail before making a decision. Compare the subscription or per transaction fees of different providers as well to better judge what the cheapest option available is.
Learn about the company from online review sites.
If you are looking for quality services, a great idea is to see what is being said by their past customers. With a huge number of dedicated websites made for review postings of merchant account providers, it may take only a few minutes to learn what past or current clients have to say about the company. Because of feedback and review sites, It is now nearly impossible for a merchant account provider to get away with having bad quality of services. Review sites can definitely help you in narrowing down your options.
Is Support effective?
Dealing with online money transactions will usually always have some problems from time to time. Issues with the payment gateway, a wrong transaction, and incorrectly taking someone else's money are just a few examples. In these cases, you need to ask for the immediate help of the tech and/or customer support of your merchant account provider. It is critical to partner with a provider that offers quick, responsive, knowledgeable, friendly and efficient customer and tech support. You may also like to work with a merchant account provider that offers 24/7 customer support, if your business requires this.
In addition to these basic tips, you can also look into the technology used, the experience of the company in the industry, security offered against frauds, approval rating and setup time. For small businesses, companies with low start-up costs and low monthly fees are usually quite attractive while large businesses often prefer merchant account providers who offer efficient 24/7 customer service, security features, fast processing speeds and advanced technology. In any case, you need to do detailed research about different merchant account providers before making a final decision.
