So you have finally decided to apply for merchant account to accept credit card payments. Congratulations! That is a positive step which will significantly make a big difference in your small business. However, before you sign up that merchant account agreement, the following important pointers for you to consider:
Reputation of the merchant account provider. A small business can apply for a merchant account from a bank, a credit card issuer or a third-party credit card merchant processing company.
However, it’s important to choose a reliable processing partner. It’s important to spend time investigating the background and reputation of the company you are considering.
Some banks may offer merchant account services but if credit card merchant processing is not part of its specialization, your options may be limited, particularly with regards to payment systems and processing equipment. Hence, it’s best to choose an established bank that can offer you the service and support you need.
Timely payment. If there is no problem with the credit cardholder’s account, payment for the purchase should be deposited to the merchant’s account within 2 business days. However, for some credit card merchant processing companies, the processing can take longer than necessary. It can be a major hassle for a small business and can have a significant effect in your cash flow.
Credit card processing fees. There are various fees involved in credit card processing. You need to be clear about the costs you may incur once you begin accepting credit card payments. For example, the discount rate is the fee that you will be charged for each credit card sale you make.
The discount rate may cost anywhere from 1.50% to 2.50% of the amount of sale, depending on the type of processing involved. Take note that the discount rate for online and MOTO (Mail Order Telephone Order) transactions will be higher than retail transactions (a customer presented the actual credit card).
Some credit card processors provide unreliable service but may impose a hefty sum of penalty or cancellation fee should you decide to switch to another processing company. You need to be aware of all fees right from the start to avoid unpleasant surprises later on.
Flexible payment systems. Customers use a variety of credit cards and debit cards. It would be great if you can accept all types of payment, not just credit cards or debit cards that bear the VISA or MasterCard logo.
Reliable customer support. Will you be provided with training especially with the use of the equipment or the credit card terminal? Are the procedures clearly explained to you? Will there be an available hotline that you can call 24 hours a day, 7 days a week? Can you count on your credit card processing partner’s support, especially after you signed up for the service?
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About the Author:
Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.