| Merchant account services are the services
that allow you to accept credit cards as payments, both online and off, and help you
handle the credit card transaction processing. Without merchant accounts, your customers
would have to pay with cash or check- and believe it or not, most customers will spend
more if they can swipe their card and worry about the bill later.
The Cost of Accepting Credit Cards
Merchant accounts can be costly. There are numerous
providers of merchant accounts that are reputable and offer good value for their service-
but there are even more providers of merchant accounts that charge excessive fees and have
hidden expenses that you were not aware of when agreeing to use their service to accept
credit cards online.
Fees range from per transaction fees (usually a percentage
or a few cents on each card processed) to monthly or annual maintenance fees that can
range from a few dollars to a few hundred dollars.
Online Businesses Need Merchant Accounts
Online merchant accounts are crucial to having a successful
online business venture.
Consider it from the eyes of a customer: if you were on a
website, looking to buy a widget, would you want to take the time to mail a check or money
order, or do you plan on making a purchase right then with your debit or credit card? Most
people don't want to take the time to write and mail a check or money order for an online
purchase- not having the ability to accept credit or debit cards will severely hurt your
business as an online merchant.
As the merchant, credit and debit cards make your life
easier, as well. You get your money much faster than waiting for a customer to write and
mail a check or money order; and you don't have to wait for the payment to clear the bank
before you can mail out their purchase. Credit card payments offer you payment within a
day or two of the customer putting in the card details.
Deciding if a Merchant Account is Worth the Fees
So are the fees that are paid for merchant accounts worth
the value the accounts provide your business? It all depends on the type of business you
are operating and the volume of sales you process on a given month, as well as the
merchant account provider you choose to go with.
Merchant account providers are not a one-size-fits-all
solution for every business, and you really need to do a little research before selecting
a provider. Consider the per transaction fee, the application fee, monthly maintenance
fee, set up fee, and any annual membership charges you must pay. Do you have to purchase
or lease any special equipment? Is the software for processing online credit card payments
included in the service, or is that an additional fee?
Once you have that information for a few different merchant
account providers, you can determine what you believe your credit card sales will be each
month. This may be difficult to do, but make your best estimate based on your current
level of sales and the idea that people typically spend more with a credit card than they
do with cash.
Determine what fees you'll pay on your estimated amount of
sales each month, and see if it makes sense to pay for a merchant account. As mentioned
previously, if your plan is to operate an online business- you really need a way to accept
credit card payments online in order to become successful. |
