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Boosting_your_business_with_a_merchant_account
| Boosting your business with a merchant account
The great majority of business conducted online is processed
with a credit card. Also, credit card sales tend to be four
times larger than a sale completed any other way. Knowing that
most people decide to use a credit card and spend more when
doing so, it only makes sense to be able to accept credit card
payments.
The first step to being able to accept credit card payments is
getting a merchant account. A merchant account is a special type
of bank account that is able to receive payments from credit
card purchases. Along with your account you will also need a
hardware or software solution to actually process the payments,
but this doesn't have to be supplied by the company providing
your merchant account.
For online credit card processing there is one extra step, you
also need a payment gateway. A payment gateway is a company that
provides real time authorization of online transactions. When
looking at gateways make sure that they are compatible with your
site's software and your financial institution. You may wish to
research your gateway and financial institution options before
signing up for any services.
When researching your merchant account providers you may be
surprised at the number of options available to you. While there
are a lot of options, selecting the best provider for you is
easy to do by knowing a little about what each company offers
and how much they charge for their services.
The first step should always be to seek a mentor. Do you know
someone who currently is conducting a similar business? If so
ask them who provides their merchant account and what their
thoughts are on that provider as well as others that they may
have tried. After asking around search the Internet for people's
opinions on merchant accounts. While opinions are not a good
reason to base a decision, their accounting of the service they
received and the ease of company to work with are valuable
information to know.
After determining which companies will be the easiest to work
with you can begin to narrow down your options by examining the
services offered and history. A good merchant account provider
should have extensive experience working with growing
businesses. This experience will allow your merchant account
provider to be able to set up your account faster, will ensure
that they can expand their services as your company grows and
requires more options and most importantly, has the experience
required to actively combat fraud and charge backs.
Of course nothing is free, and your merchant account is no
exception. The amount that you must pay will vary from company
to company but the basics of your bill should be the same. If
the company you are considering is charging more you may wish to
seek another merchant account provider.
The biggest single cost is the set up costs. Your set up costs
include your application fees, equipment costs and deposits.
These fees tend to average about $275 but vary depending upon
the options you have selected. For example, your start up costs
will be much higher if you have decided to purchase your credit
card processing equipment instead of leasing it. This may be an
economically viable solution after adding up the amount of the
deposit that will be required if you lease the equipment and the
leasing fees for a year.
Another thing to keep in mind is the amount that your merchant
account provider will be charging for each completed
transaction. On average you will be charged 2.5% of the sale and
there may be a few more annual fees. Be sure to very closely
examine that amount you will be paying and what additional fees
you may have to pay as each company will be different and the
difference may save you a lot of money each year.
Starting and having a business grow is a very exciting time for
any business owner. As you expand into new markets, such as
online sales, you will find a plethora of new options and
opportunities. After deciding to expand be sure to carefully
consider your options in order to make your next step as smooth
and cost effective as possible.
About the author:
Jakob Jelling is the founder of http://www.cashbazar.com. Visit
his website for the latest on personal finance, debt
elimination, budgeting, credit cards and real estate.
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