Advice On Choosing The Best Merchant Account Provider
Finding a merchant account provider can be a hard task to decipher. In today’s world, if a business does not have the ability to accept credit cards or electronic payments, it is as good as giving away business to their competitors. No business owner wants to give away business. That’s why it is important for business owners to start researching merchant account providers prior to needing one and periodically stay up date on any changes in the industry. When the time comes to make a choice on selecting a provider the business owner will already have all they need to make an educated decision. Here are a few things that need to be considered when choosing a merchant account provider and their services.
Some owners make the mistake of choosing the services of their retail bank, or the first merchant account retailer they come across to process their credit card transactions. This can be a huge mistake for the business as retail banks often charge more for merchant services that they outsource. Business owners do not need to pay a middle man for merchant services they can find with a little bit of research and comparison shopping.
Business owners can begin researching various providers by getting recommendations from other small business owners they may know. The first aspect they will want to review is finding out what major credit cards the merchant service provider accepts. Major credit cards include Master Card, Visa, American Express and Discover.
For small business that also accept international payments, they will need to inquire about acceptance of international credit cards. Some providers do not accept foreign cards unless it is one of the major credit cards listed before. Many business owners have been surprised by suspension of their merchant account services because of the acceptance of international credit cards.
After Inquiring about how many of the major cards can be accepted, owners will need to carefully review all fees associated with that particular merchant provider.the start up costs involved. Many merchant service companies may charge a set-up or installations fee. However in recent years some merchant service providers have waived these fees.
Owners will also want to research possible additional fees such as programming, annual or other set up expenses. Usually companies will charge lower fees on transactions that seem too good to be true but make up for them on other inflated services. These providers make their money by offering a deal on the overall transactions in the merchant account but the truth is businesses end up paying for these too good “discounts” in form of other bloated fees and extraordinary expenses.
That being said, before signing any contracts with a merchant service provider a review of that businesses Better Business profile will need to be reviewed. Many service providers will be registered with the Better Business Bureau however there are a few who are not registered for various reasons. If the provider is found to be registered, making a call or written inquiry to see how many complaints were lodged against the company will be one more precaution that can prevent unnecessary financial loss. Usually a business that inquires about companies practices will also be able to obtain information as to how the complaints were handled.
Also when researching the providers fees, owners should ask about the overall price on the per transaction fees charge also known as a discount. These fees are usually charged as a percentage of the sale. Usually the per transaction fee is no more than 2-3% of the total sales batch. Merchant providers charge by the batch on a per transaction basis. Batches are the sum of the transactions that have been processed in a merchants account at a specified period of time usually a month. These fees should be reasonable but again small business owners should be aware of too good to be true fees.
While reviewing the fees, there are other possible unexpected expenses that small business owners will need to be aware of before selecting a provider. One area is when reserves are placed on a merchant’s account who is considered high risk. This fee is like protection against loss to the merchant service provider. The reserve money is held in escrow against the business owners account for charge backs from the merchant’s customers.
Small Business owners will also need to ask if a potential provider place a cap on the monthly volume of sales that they have each month. For a growing business this can be detrimental. Sales can vary from month to month. A merchant provider who caps monthly sales can hinder a business and in some cases even result in loss of customers.
Credit card processor equipment used to be an expensive item as a part of obtaining a merchant account. However, times have changed so much that many providers will either provide the equipment free or at a discount to new clients.
A lot of times promotions on equipment for the merchant account will come with stipulations that may make the offer null and void. So before an owner accepts an offer on a merchant account and the equipment, they will need to ask how many machines are covered under the offer.
Leasing equipment is another option if a small business can’t afford to purchase their own equipment outright. However, there are still questions that still need to be asked before signing any type of agreement for leasing or purchasing equipment. When it comes to credit card processing equipment, small business owners need to know whether they will be processing more transactions using an electronic swipe reader or keying in orders via telephone. Traditionally keyed in orders are charged higher rates than transactions that are swiped. As an alternative some merchant providers may help a small business obtain a point-of-sale terminal and may offer a short term financing of the equipment to repaid over time.
One last aspect to obtaining a merchant account, is evaluating the level of customer service offered by merchant account providers to the businesses customers. 24 hour customer service would be the most ideal especially when most of a businesses sales are generated online.
Once all the information has been gathered a business owner can make a solid decision on what merchant provider is best for them and their company. Keeping notes on each merchant provider services can help a great deal and in the long term may even help the business owner save money and gain more sales.
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