Compare Merchant Accounts To Increase Cash Flow To Your Business
Merchant accounts are contractual agreements between a participating bank who extends a line of credit to a merchant. This allows businesses to accept payment for goods and/or services from credit cards.
It should be known that customers are much more likely to buy from businesses that accept credit cards. Statistics show that businesses with merchant accounts will see sales numbers increase immediately. According to statistics, the average cash sale is $9, while the average credit card sale is approximately $40.
Regardless of the type of business, the availability of merchant accounts will definitely improve your cash flow in several ways. Below are some benefits for using merchant accounts:
- Having credit card facilities means customers can purchase right on the spot.
- Merchant account processing fees are frequently lower than check transaction fees.
- Debt Collection issues become the banks problem, not yours.
While there are some definite benefits to having a merchant account facility for your business transactional needs, there are also some drawbacks to think about.
- You will need to protect your business against instances of credit card fraud.
- You may need to examine and possibly revise your policies concerning charge-backs and refunds to minimize damages.
- If you accept credit cards on your website, make sure you're using fraud protection measures to minimize fraud, theft and scams.
Setting Up Merchant Accounts
Setting up a merchant account is often a relatively simple process. A company bank account will be needed for deposits from any credit card purchases. You'll need to also lease processing equipment and/or software in order to process transactions.
If you're planning to process credit cards via your company's website, then you'll need to register with a payment gateway like VirtualNet or CyberCash. You should also make sure that the merchant account software you're using will be compatible with your online payment gateway.
Importance Of Comparing Merchant Accounts
Before you call your bank to get a merchant account, take the time to compare the options and offerings of several different banking institutions, in addition to merchant account providers. Fees and charges often vary greatly, so its very important to check what you'll be charged and what fees are likely for each transaction.
For instance, fees might include initial start-up costs, equipment monthly lease fees, sales volume costs, transaction and processing fees. When looking at potential merchant account providers, be sure to ask for a written list of all the fees you're likely to incur so that you can accurately compare them with other vendors.
Merchant Account Charges and Fees
Most providers will charge some form of application fee. This can vary from $0 up to $100 and sometimes more depending on your lender.
You may need to pay for your software, which can have an initial cost around $100 or more. Once installed, you may have to pay a monthly licensing lease, which can vary from $20-$50 a month. This, too, will vary and depend on your lender.
On top of these, you will incur transaction fees that range between $0.20-$0.50 per transaction. While these don't sound high, if you process a lot of transactions they can really add up.
Other fees to ask about with any potential merchant account provider are charge back fees, minimum usage fees, statement fees, annual fees, close-out fees and account keeping fees.
It should be known that customers are much more likely to buy from businesses that accept credit cards. Statistics show that businesses with merchant accounts will see sales numbers increase immediately. According to statistics, the average cash sale is $9, while the average credit card sale is approximately $40.
Regardless of the type of business, the availability of merchant accounts will definitely improve your cash flow in several ways. Below are some benefits for using merchant accounts:
- Having credit card facilities means customers can purchase right on the spot.
- Merchant account processing fees are frequently lower than check transaction fees.
- Debt Collection issues become the banks problem, not yours.
While there are some definite benefits to having a merchant account facility for your business transactional needs, there are also some drawbacks to think about.
- You will need to protect your business against instances of credit card fraud.
- You may need to examine and possibly revise your policies concerning charge-backs and refunds to minimize damages.
- If you accept credit cards on your website, make sure you're using fraud protection measures to minimize fraud, theft and scams.
Setting Up Merchant Accounts
Setting up a merchant account is often a relatively simple process. A company bank account will be needed for deposits from any credit card purchases. You'll need to also lease processing equipment and/or software in order to process transactions.
If you're planning to process credit cards via your company's website, then you'll need to register with a payment gateway like VirtualNet or CyberCash. You should also make sure that the merchant account software you're using will be compatible with your online payment gateway.
Importance Of Comparing Merchant Accounts
Before you call your bank to get a merchant account, take the time to compare the options and offerings of several different banking institutions, in addition to merchant account providers. Fees and charges often vary greatly, so its very important to check what you'll be charged and what fees are likely for each transaction.
For instance, fees might include initial start-up costs, equipment monthly lease fees, sales volume costs, transaction and processing fees. When looking at potential merchant account providers, be sure to ask for a written list of all the fees you're likely to incur so that you can accurately compare them with other vendors.
Merchant Account Charges and Fees
Most providers will charge some form of application fee. This can vary from $0 up to $100 and sometimes more depending on your lender.
You may need to pay for your software, which can have an initial cost around $100 or more. Once installed, you may have to pay a monthly licensing lease, which can vary from $20-$50 a month. This, too, will vary and depend on your lender.
On top of these, you will incur transaction fees that range between $0.20-$0.50 per transaction. While these don't sound high, if you process a lot of transactions they can really add up.
Other fees to ask about with any potential merchant account provider are charge back fees, minimum usage fees, statement fees, annual fees, close-out fees and account keeping fees.
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