Accepting cash, like bartering with chickens, is no longer viable as a primary means of accepting payment. To compete in today’s world, businesses of all sizes must accept credit and debit cards. However, there is a technological requirement for this golden payday. A merchant account is necessary to accept card payments.
Credit Card Processing: 4 key points to consider when choosing between a dedicated or aggregated merchant account
Offering your customers the option to pay with a credit card is a great way to enhance revenue for your small business. Your customers want the points associated with rewards cards, and they want to manage their own cash flow by floating balances or financing their purchases. Allowing them to use credit cards accomplishes both.
Cash and checks are continually becoming less and less common with your customers, and payments in the form of online, credit and debit cards are only growing in popularity. A merchant account can help you open these opportunities and add value to your company in a number of ways. Take a look below for some benefits of a merchant account.
This is what every small business owner wants to hear and hopes that it’s this easy. (Many will say it’s not) One of the first obstacles you will come across is how you will accept payment from your customers (Makes sense, right?). Now the questions come out;
- “What type of payments should I accept?”
- “What are the pros and cons of these payment types?”
- “What are the costs of accepting payments?”
Applying for a merchant account can be an intimidating process, especially if it is your first time in the marketplace. Because merchant processors or banks, depending on who you are applying to, assume risk to provide you with merchant processing capabilities, there is an approval process involved. The merchant account application process evaluates you and your business information in order to minimize that risk.
What risk, you might ask? Instances of businesses going bankrupt or having an inordinate amount of chargebacks all introduce financial risk and liability for merchant processors. Also, upstanding businesses like yours are not the only folks trying to get approved to debit peoples’ bank accounts and credit cards. It’s an obvious opportunity for fraudsters. So, banks and merchant account processors do their homework before entering into a partnership.
The chargeback: A forcible reversal of funds typically due to a credit card holder’s dispute of the transaction.
Originally established in 1968 as a credit card holder’s protection against clerical error, the chargeback has become a major tool in the fight against identity theft, especially for online credit card processing and ACH transactions.
For a small business, though, credit card processing chargebacks can be a huge headache. Don’t get me wrong, we’re all for consumer protection, but as you can see below, they can be also be caused by miscommunication or flat out consumer fraud. At worst, chargebacks can affect a small business’ ability to maintain a merchant account and accept future credit card or ACH payments. Merchant account providers can also impose steep fines associated with high chargeback rates (upwards of 1% of all transactions) or put funds on a hold.
So, how can you help protect your business and maintain good standings with your merchant account provider?
The New Year brings new opportunity to add revenue to your bottom line, and what better way than to join the rest of businesses that accept online payments.
The reasons are obvious and plentiful for why you should start offering online payment options. According to the most recent 2011 Billing Household Survey, options are what your customers want the most from your billing services. A fifth of customers indicated that they change the way they pay their bills every month, with 59 percent having already used a direct billing website, 53 percent having used recurring billing and 38 percent having paid their bills through online banking services.
In addition to making it convenient for your customers, statistics show that businesses get paid faster when they accept online payments. Instead of hassling your customers to remind them of bills being due, you could set them up on a recurring payment system, or accept a payment over the phone.
Recently we conducted a survey of our small business customers to find out:
- How they billed and collected payments from customers before they automated their receivables
- What was important to them in a payments solution
- What benefits an online receivables solution provided to their business
Recently we conducted a survey of our small business customers to find out: How they billed and collected payments from customers before they automated their receivables What was important to them in a payments solution What benefits an online receivables solution provided to their business PaySimpleMore Posts
We at PaySimple get a lot of questions about merchant accounts, and we’d like to take a few minutes to let you know you’re not the only merchant wondering how this whole thing works.
Here are some frequently asked questions we receive about merchant accounts: