What is meant by merchant account and why you should hire merchant services credit card processor?
If you wish to accept debit card and credit card payments from your clients, you should approach merchant services credit card processor. Merchant is an alternative word for business owner or seller. The merchant account is just like a bank account which extends your line of credit. It permits the merchant to get funds for credit payment based on the faith that they will deliver the goods or perform the services properly. This way, the client will not decline to pay for the business deal based on the merchant’s inadequacy.
Having a merchant account is one of the reliable ways to receive credit card payments. It helps in facilitating interactions which require to occur between your customer, you, your payment processor and credit card networks each time you get the payment. It is a tricky business to accept all credit cards. It assists to make sure you are getting funds in quick time as possible and at the same time banks are preserved from losses and purchasers are safeguarded from scams and rip offs. When it comes to a merchant account, everyone remains responsible according to the regulations of the credit card processing bond.
It is necessary to pay certain fees to make use of the services offered by the merchant services credit card processor. However, it is easier and secure to create a merchant account instead of maintaining a book of credit financial records for your customers.
Steps to select a merchant services credit card processor
The payment processing world is huge and developing continuously as the new payment avenues and technologies expand. The customers are no longer confined to paying credit or cash. At present, you have a wide range of options from utilizing debit cards to smartphone payment apps. The customers are choosing their purchasing fondness by the product the store sells as well as the kind of payment the store accepts. It is the reason it is important to choose the best merchant services credit card processor. It helps in making a significant influence on the level of sales you are making and long term clients you win over.
Debit and credit card networks do not interact openly with businesses of all size. They hire credit card processing services through merchant services credit card processor or merchant account providers. They are also referred to as aggregators. Then, they function with payment processors so as to perform transactions. Most new business owners usually find the credit card process confusing when they are planning to take online payments.
Some of the important terms you should understand are as follows:
Payment processor: It can be referred to as gatekeeper between issuing banks or credit card association and merchant account provider. They share the order payment details for settlement and authorization.
Merchant account providers: They provide your business the Point of Sale equipment and safe online payment solutions for your business. Moreover, they take order payment details and share the details to the credit card payment processor.
Payment gateway: It serves as an application service supplier for eCommerce transactions which allows a safe interaction between the payment processor and merchant account provider. It is possible for the merchant account service provider to send the order payment details to the processor and then permit the processor to transfer the details to the dispensing bank for approval or denial.
Factors to consider when selecting merchant services credit card processor
How much you may lose while paying fees? One of the most important things to consider is the fees that cause stress to your business. Certain common fees you would encounter include:
- Setup fees: Certain processors charge a certain sum for setting up their equipment.
- Application fees: It is necessary to pay them a fee for processing your application.
- Monthly statement fees: They may charge a certain sum for emailing you the statement.
- Interchange fees: It is applied for all transaction which is accomplished for business order payments.
- Monthly gateway access cost: They may charge for the information transaction between the payment processor and issuing bank.
- Monthly minimum fee: Remember, the credit card processor collects the minimum sum as fees from the business even in times of slow sales.
What is the compatibility of the processor’s software?
Though several processors function with universal software, it is necessary to make sure that your online business shopping cart functions with this software. It is also best to choose a processor which provides options to carry out digital wallet payments since more people are utilizing their smartphones for making payments.
Does the processor provide interchange-plus pricing?
The credit card processing companies should be transparent when it comes to interchange fees. You can obtain clear information on how much you need to pay as fees to the payment processor. Such kind of pricing lets you track expenses and this way you will not be overcharged.
What are the charges to be paid for early contract closure?
It varies from one company to another. The company may charge from a few hundred dollars to several thousand dollars. Search for contracts which charge lesser than $500 for termination.
Red flags to eliminate in merchant services credit card processors
A liquidates damages closure cost is a primary contract termination method where your business would be charged the full agreement’s estimated amount. If you are canceling within the first few months or weeks, your business would be charged for the breakage of the agreement and the mislaying of fees which the business account processor may have obtained. Non qualified rates is another important red flag you should watch out.
The non-qualified charges are rates charged for certain kinds of transactions like credit card payments when a customer performs through the phone. The charges can be anywhere between 5% and 8%. It can be applied to various kinds of transactions. Ensure to request a sample monthly statement from thecredit card processor. This way, you can see the charges for each transaction and you can also right queries for better clearness of their services.
