Tuesday, June 28

Merchant Account: Do You Really Need One?

Most customers expect businesses to accept online payments, but you need a merchant account to do so. Here is what you need to expect when opening up a merchant account for your business with business merchant services. 

Credit cards mostly don’t process by themselves, and it is where the merchant account comes in. Merchant services payment processing is an essential middleman that allows your business to accept debit and credit cards both in-person and online. However, you need to know why they are important in accepting debit cards and credit cards. Does your business really need to process electronic payments online? Dig in to learn how to obtain a merchant account – 

Do your due diligence.

The first step to getting a merchant account is to do a little research, and there is always a variation in the fees as well as capabilities. You need to know which companies are offering suitable solutions for your business. For example, some processors are more likely to be related to your business, while the others are experienced in a particular transaction type, and those include online purchases or retail sales. 

You can even look online to compare processors, and it is also possible that your bank can offer merchant accounts, which is something to consider. Your bank is likely to approve your business for opening up an account with business merchant services, especially if your company is entirely new. Additionally, you need to compare hardware costs, get customer support, and contract length to any posted fees. 

Get your paperwork in order.

You need to provide your business with the needed information, including your organization’s name, contact information, length of time you have been in the business, financial statements, bank account details, and routing numbers. Sometimes even credit card details to pay application fees. 

Apply for a merchant account

The merchant service provider will check your personal and business credit history when you submit the requested information. You may need to pay a certain application fee depending on the provider. 

How does payment processing work?

Following are the steps that are followed when a credit card transaction is processed – 

The transaction goes through a payment gateway.

A payment gateway is different from a merchant account that checks if the cardholder has a sufficient sum for the transaction involved. A transaction done without using the card is done online with the use of a payment gateway that connects to the credit card company. Another valuable tool used is a payment gateway, which is again useful if your customers frequently place pickup orders even before the time.

Money gets deducted from the customer’s account.

The merchant account usually deducts some purchasing amount from the customer’s bank account or the credit card account when the entire transaction is approved. The first deduction fees range from 3% to 5% of the total. However, the fees can vary depending on the payment options. 

The deducted money is deposited into your company’s account. 

After the amount deduction from the customer’s account, the money gets deposited into your company’s transaction account. Those deposits usually arise in batches at the day end or very less frequently rather than right after the transactions. 

Finally, if you want to accept your customer’s debit or credit cards, you need to secure a merchant account you get with business merchant services. Today, most customers expect to pay for their purchases with credit or debit cards. Most people don’t even carry cash daily. When you refuse to set up an account, you lose various customers, and not accepting credit cards can hurt your bottom line.