A merchant account is a special bank account for businesses that lets them accept charge cards. By setting up a merchant account, a retailer enters into an agreement with a merchant bank along with a payment processing service, where transaction and monthly fees are charged to the retailer in exchange for a charge card payment infrastructure. Not all accounts are the same, different kinds will be better suited to different businesses, and rates will be different from bank to bank. Spending some time to educate yourself about the different credit card processing services available could very well save a lot of money in fees over the long term. This article will look at the main kinds of merchant services available and the sorts of businesses that are best suitable for each.
Regular merchant accounts are generally used by retail stores. They are also called OTC, or over the counter, accounts. These merchant accounts have the lowest fees, usually around 2%, because they are considered to be the safest. This comes from the reality that the physical credit card is present and swiped at the point of sale, reducing the risk of fraud. Internet merchant credit card accounts function in the same way except that charge card information is going to be entered manually to their computer by the customer. Fees will be higher as the chance of fraud is greater.
3rd party merchant credit card accounts use services like PayPal, 2CheckOut, and ClickBank as an indirect link to merchant banks. These companies will process charge card transactions in exchange for a percentage of the sale price. This amount can range between 3% and 15%. The advantage of this type of service is that there are no monthly fees or transaction fees. This can be a good solution for international businesses who do not want the expense of a merchant account or occasional retailers who make infrequent sales. Rates will vary from business to business and will also depend on the kind of transaction.
High-risk merchant accounts really are a sub category of internet accounts that cater to industries where credit card scams and fraud is more common. These industries include gambling, the adult industry, pharmaceuticals, and telemarketing. Any business involved in sales of this nature will likely be forced to get a high risk account and pay higher rates. International accounts may also fall under this category.
A great place to begin when looking around for an appropriate merchant account is to consult customer reviews online. It is important to compare as many reviews as possible in order to determine the prevailing opinions and not just a handful of isolated reviews. Another good way to search is by asking other local or similar businesses who they normally use. This way you can get practical reviews from people with experience. Checking the Better Business Bureau for objective professional comparisons of products is likewise an important step to take before choosing a merchant account.
Accepting credit cards in this day and age is very important for most businesses, especially those that rely on the internet. Merchant services by nature include lots of transactions and so even small differences in fees can add up quickly. Seeing as there are many companies that provide merchant accounts, it is possible for retailers to shop around to find the best deal and the best fit for their business. Spending some time to learn the ropes will most likely represent significant savings over time.
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