Which merchant account type is best for my online business?

Which merchant account type is best for my online business?

These days, it seems every business is online. If you do all or part of your business through a website, a special type of merchant account designed for online business may be the best choice for you.

Before you decide, you should consider all the types of transactions you make now or could make in the future. If you also sell products in a brick-and-mortar store, you may need a merchant account that accommodates multiple types of credit card transactions -- retail and Internet -- or you may need a separate merchant account for each type of business. To make this decision, you should find out exactly what types of transactions the merchant account supports, any restrictions that apply and the extra costs involved for processing different types of transactions.

Technical considerations
When you sell online, there are several parts involved in accepting credit card payments. Your merchant account provider may offer a turnkey solution that gives you everything you need. Or you may need to use more than one service provider to complete the entire process.

As pointed out in The Free Library, you will need a form on your website where credit card information can be entered and encryption technology, such as Secure Sockets Layer (SSL), to keep that information safe. You'll also need a certificate that lets your customers know that your site is secure. If you use a shopping-cart system, you need special software. As indicated by Advanced Merchant Services, the software must be compatible with the payment gateway, such as Authorize.net or Verisign. Different merchant account providers work with different payment gateways.

 If you choose a merchant account provider that offers a turn-key solution, you will probably pay more, but you have the convenience of one provider that can set you up to do business online. In this case you need to be sure the merchant account provides everything you need. On the other hand, if you feel confident that you can merge different services into one cohesive credit card processing system, you may save money by using different providers. In this case, you need to ensure that the merchant account you choose is compatible with the other software and the payment gateway you use.

Service
When you do business online, your store is open 24/7, and you can't afford any down time. You need to be able to count on support any time you might need it. When choosing a merchant account provider, you should specifically ask about the level of service they provide, the availability of service and how you can access their service.

Cost
The costs involved in an online merchant account include several different types of fees. The discount rate is the percentage fee that applies on the total amount of credit card sales. This fee is generally a little over two percent for Internet merchant accounts. The transaction fee, which is a fixed amount for each credit card transaction, generally ranges up to 25 cents.

If the merchant account company provides gateway access, it may charge a gateway fee, which can be up to around $15 or more. Other potential fees include a statement fee, monthly minimum fee and a one-time startup fee. The Merchant Account Guide Web site has a comparison of several different Internet merchant account providers where you can compare the fees they charge.

Published: May 27,2023