To enjoy the benefits of online and mobile payment processing, your business will need a merchant account. With one of these specialized bank accounts, you’ll be equipped with the tools you need to start establishing or even scaling your business into the online sphere.
But what is a merchant account, exactly? And how can you set one up to start making the most of your payment processing options?
Below, we’ve put together a comprehensive guide to merchant accounts and how they can benefit your business.
What Are Merchant Accounts?
Merchant accounts are a unique type of bank account designed to give business owners a way to store transaction funds. These funds are typically generated from credit and debit card sales.
Without a merchant account, you’ll be unable to set up a credit card processing system. This makes a merchant account a must for those looking to establish an online business or online portion to their business.
In order to get a merchant account, however, your business will need to enter into either one of two types of contracts. First, you can choose to sign a contract with a bank that offers credit card processing through either MasterCard or Visa. The other option is to sign an agreement with an ISO or MSP. These providers are authorized agents of qualified banks.
The purpose of your agreement will be to ensure that you abide by regulations as assigned by the credit card processor of your choice.
Benefits of Having a Merchant Account for Your Business
With this in mind, it’s important to consider the various benefits that having a merchant account can bring to your business.
- Accept Debit and Credit Card Payments
By far, the most obvious benefit to having a merchant account is gaining the ability to accept credit and debit card payments. This makes it much more likely that customers will make a purchase from your business.
It also lets you accept payments online and on the go. In this way, merchant accounts open a new realm of possibilities for those looking to take their business to the next level.
Additionally, in today’s modern era, not having credit card processing capabilities can be detrimental to one’s business. By staying up-to-date with your payment processing, you’ll be able to attract more customers and keep a competitive edge in the market.
- Increase Sales – Plan to Succeed
This means that you’ll be able to take advantage of Internet and Mail Phone Order Sales for your business. This is a must for those who are looking to grow their businesses.
When choosing your merchant account, be sure that you have a five to ten-year plan already laid out. Make sure that you are choosing an account that will accommodate for the level of growth that you’re hoping to achieve.
By making these plans early, you can ease growing pains for your business and expand your reach. Ultimately, this gives you the flexibility your business needs to start dominating the market.
- Increased Sales
Of course, this also means that you’ll be able to make more sales.
The truth is that customers are increasingly fond of more secure payment methods. By being able to accept credit and debit cards, you’ll be able to appeal to a larger number of customers. Many customers no longer carry cash. Make it easy for your customers to buy from you.
Importantly, you’ll also be able to accept payments online and on the go. This means that you can expand your market reach even further by advertising your business online. With the establishment of an online site, you’ll be able to make a successful foray into the world of e-commerce. By doing so, you can supplement the sales that you’re getting in your brick-and-mortar location.
Those looking to exclusively have an online business must remember that a merchant account is required in order to process Internet Sales as well as Mail Phone Order Sales. There are some forms of e-payments available—The majority of customers shopping online will expect to be able to use their credit or debit cards. If your site lacks this ability, you’ll see a big decline in sales. For this reason, establishing a merchant account remains one of the most important steps a merchant can take in growing his/her business.
- Accept More Currencies
For e-commerce sellers, there’s another benefit to getting a merchant account. In addition to being able to accept a wider variety of payment options, if you choose the right one, you’ll have access to a greater number of supported currencies, too.
For online retailers, this means that you’ll be able to reach and serve a larger market of potential customers. Importantly, this helps businesses grow their operations. Get your fair share.
- Increased Ticket Size
Finally, having a merchant account has been linked to customers spending more.
That’s right—some studies estimate that customers spend nearly 20% more per ticket when paying with a debit or credit card. By having a merchant account, you’ll be able to take advantage of this increase in sales.
Because customers are more likely to spend more, you should see an increase in sales and a boost in your bottom line. This makes having a merchant account one of the most profitable actions that a business can take.
But how do you set up a merchant account, and how can it be used to best suit your business? Consider our comprehensive guide on how to set up a merchant account below.
How to Set Up a Merchant Account
Setting up your merchant account doesn’t have to be difficult—You can Call to get Started.
By choosing the wrong account, you can be locked into a non-cancellable contract. Be sure to carefully consider the steps below as you set up your account.
Consider Which Credit Card Payment Options Are Right for You
Do you want to accept any additional credit cards other than MasterCard and Visa? We suggest Visa, MasterCard, Discover, and American Express. You will open your doors to more customers.
Just as easily, decide the methods of payment that you’re looking to accept. Do you want an integrated API that works with your existing site and infrastructure? When selling online, do you want your customers to pay on your site or through a third party. If it’s the former, do you have the PCI compliance necessary for this to happen?
Also, consider if you would like any mobile options. Knowing exactly what you need can help you find the merchant account provider compatible with your business.
Finally, try to have an idea of just how many sales you plan to make through your new credit card processing system. This will allow you to find the merchant services right for you.
- Find the Right Merchant Account Provider
Once you know what you need, the fun part starts. Now, you’ll need to find a merchant account provider that can help you with your bankcard processing needs (Face to Face, Mail Phone Order, Internet, and of course Mobile.
This can often be the most time-consuming part. However, don’t let it overwhelm you. By following a systematic approach, you can find the merchant services company that best fits your needs.
While searching for your new merchant provider, keep the following considerations in mind.
- Compare Fees
How much do you plan to pay for your Internet merchant services or merchant account provider?
What fees are you willing to pay, and how much are you willing to pay for them?
Understanding these questions will allow you to find the provider that’s right for your budget. This will help ensure that your business operations stay smooth as you transition into your new payment options.
If you’re looking to upgrade your payment processing from one service to another, make sure that you choose a company that can do so in a way so as to have as little interruption as possible. This proves especially true for those who are looking to make changes to their online websites.
When establishing your merchant account, you can typically expect to pay two common types of fees. The first is a flat rate for each processed transaction, while the other charges a percentage fee based on the dollar amount of the sale.
Be aware that you may be subject to other fees, such as cancellations, chargebacks, monthly minimums, and any annual fees. Make sure that you understand your merchant account provider’s fee structures so that you’re never paying more than you expect.
- Determine How Much Control You Want
Different merchant accounts will give you various levels of control over your customization? Will you be able to work with invoices and other payment forms? Can you customize them to help in branding your business, or will it all be designated for completion by a third party?
- Do You Need to Be PCI Compliant?
For online businesses, having payment structures automatically built into the website can add convenience for customers and for merchants. By keeping your customers on site, you can convince them to pay more—and expose them to more of your branding. This helps build your business’s image and establishes you as a key player in the market.
However, it does come with some drawbacks. Businesses that are looking to use credit card processing on site will need to make sure they’re PCI compliant. This will help protect your customer’s sensitive financial data.
For businesses that lack the talent and the infrastructure to handle such compliance issues, it may be better to consider account options that provide for third parties to handle this work.
- Resources Provided
Finally, consider the resources your merchant account provider gives you access to. Are they enough to handle your payment processing needs or will you need to supply some on your own? Are you equipped to do so?
Make sure that you have the information you need so that you can successfully set up and maintain your merchant account and any payment processing tools you have.
- Apply for a Merchant Account
Once you’ve selected the merchant account that you want to use, it’s time to apply for it. You’ll need to fill out an application form. This form will show the bank who you are and what you do. As well as the contact information. It will also show when the business started and your structure. Such as Incorporated, or LLC, or Sole Proprietor, or Partnership set-up. This is true for all Merchant Account Applications.
- Start Using Your Merchant Account
Once you’ve been approved for set up, it’s time to start making the most out of your merchant account. Make sure that you’re fully employing your new payment processing tools so that your business can increase its sales and boost revenue.
By following the guide above, you can start enjoying these benefits in no time!