Establishing a Merchant Account for Your Business

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Author: Zabel1

New business owners are faced with a myriad of big decisions every day. How much inventory will you sell? What kind of advertising and marketing strategies will you implement? Which location will be the most lucrative? What type of staff will you need? And, one of the most pivotal decisions a new business owner will make, what type of payment options will your customers have?

If you decide to accept credit card payments, you’ll need to establish a merchant account to process and authenticate these transactions. While this may sound like a complicated, daunting process, it’s far simpler than many business owners anticipate. And, this one step can bolster sales, earn customer loyalty and improve your bottom line.

So why, exactly, do you need a merchant account? Just a few short decades ago, most consumers paid with cash or check for nearly all their purchases. Credit cards were reserved for select, large purchases. But today’s consumers prefer to use plastic for everything from coffee at the corner store to car and mortgage payments. The savvy business owner can see that consumer culture and spending habits have changed.

Many consumers have stopped carrying cash all together for safety reasons, fearing they’ll be targeted for burglary or theft. And many businesses avoid cash transactions for similar reasons. When it comes to checks, the threat of forgery and fraud has persuaded many businesses to refuse this payment method to evade the hassle of bounced, counterfeit or stolen checks. Since credit cards are widely distributed and standardized, businesses and consumers alike feel more secure about these transactions.

Merchant accounts are undeniably valuable. But to take full advantage of these accounts, you need to pick an account that suits your business’ specific needs. The majority of retail businesses use at least one swipe terminals for credit card transactions. These easy to use devices are usually set up at the point of sale and can be used by clerks, salespeople or the customers, depending on the system you choose.

If your business operates from remote locations, you may be best suited with a mobile merchant account, which enables payment processing with a convenient portable swipe terminal, a cell phone or a laptop system. Point of sale software and touch tone systems, which use computers and phone lines to process credit card transactions, are also available. While nearly every type of business can use these payment processing methods, they’re extremely convenient for businesses that accept payments over the phone, fax, mail or email. Though most types of businesses can use these two alternatives, they are especially attractive for companies that accept orders and payments via telephone, fax, mail, or email.

In an effort to keep costs down, some business owners decide against merchant accounts. But what they may not realize is that refusing credit cards dissuades a large amount of potential customers on a daily basis. Cash-only businesses are notably less convenient and ultimately encourage consumers to patronize their competitors. While overhead costs could be marginally less for cash-only establishments, the bottom line and growth potential suffer in the end.

Again, setting up a merchant account is easier than many business owners may think. And with a small amount of research, you can determine what kind of merchant account is the most cost efficient. Taking a little time to comparison shop for processing software or equipment can help your business choose the best system for the lowest price.

It’s also important to carefully evaluate merchant account rates and fee structures. The volume of credit card transactions your business processes will determine the account fees. By closely monitoring your credit card sales, you can minimize merchant account costs and save a substantial amount of money.

Other business owners assume that accepting credit cards requires complex hardware and software, and avoid merchant accounts in an effort to keep their businesses as simple as possible. But what they may not understand is that contemporary merchant accounts are extremely user friendly and streamlined. Today’s retail swipe terminals walk the cashier and/or consumer through every step of the process. And merchant account computer software uses intuitive procedures and easy to use formatting to simplify credit card data entry and bookkeeping. With every merchant account, payments are automatically transferred to the business’ account, eliminating the need for inconvenient trips to the bank. Finally, most merchant account providers offer a variety of reliable support networks to help their clients if any issues arise. This customer support makes it easy for businesses to ask questions and get all the assistance they need via email, online instant messaging or telephone.

Your business can grow and prosper with the right merchant account. While the application and setup process may take several weeks, the hardware and software systems operate with very little oversight from the staff and business owners. The notable increase in profits that result from catering to customer convenience will be quite evident every time the business owner checks the company’s bank account.

Karan Zabel is a freelance writer who writes about North American Bancard