ACQUIRING MERCHANT ACCOUNTS SIMPLER

2007-03-08 10:33:40

( Business )



Businesses are growing fast online; more consumers opt to use credit cards. Nowadays, with the 'plastic' being widely used, merchant accounts are inevitably needed by business organizations and individuals. Transactions, whether real or reel, are becoming electronic.

Merchant accounts are accounts that make credit card payments permissible. A merchant account is registered so people can make electronic payments. Merchant accounts are also called payment processing.

Here is how a merchant account works: If you key-in or swipe a credit card, its data is entered into processing networks. Through these networks, funds from your buyer are transferred to your merchant account.

You will be charged a percentage per transaction, called a discount rate. And also for a transaction fee, a flat-rate fee per transaction. Discount rates depend on the business type, how the business is transacted, and other factors. You are still going to pay credit card companies a monthly minimum and your bank a statement fee.

Obviously, the advantage of acquiring a business merchant account is having more sales. Credit cards ARE getting popular. One study shows that businesses without merchant accounts lose 60 percent of their sales.

In applying for merchant accounts, you must have a business address and a bank account. Familiarize yourself with merchant banking; this will help you find your way through the process of application.

You must note that getting a merchant account online is harder than acquiring a one for brick and mortar transactions. This is because transactions online are more at risk.

If you face problems in getting an online merchant account in a bank, you may choose to employ a merchant broker. Be reminded that online discount rates are higher.

If you are thinking about putting your business online, try cybermalls and other ecommerce hosts. They provide merchant account services.

For example, small businesses can get a yahoo merchant account if they choose it as their host. Yahoo merchant accounts are processed quickly but you can not do business in yahoo without a global merchant account.

Banks may quote you to fall in high risk merchant account category. Should this happen, don't be frustrated. Some other bank may not see you as such. It is important to have choices.

Compare different merchant account services. Ask colleagues and friends already doing business online to help you decide which merchant account can give you the best deal.

Finding the best merchant account for your business can be easy with thorough research and planning. Just don't go rushing into contract signing without reading everything.


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