Consider these factors when selecting a merchant account

Consider these factors when selecting a merchant account

Everything else aside, you will want your ability to accept credit card payments to be versatile. You're convinced that your business needs a merchant account telephone system for credit card processing. You have many merchant accounts from which to choose; now your task is to pick the best one for your needs.

Keep in mind that you want your merchant account to accept not only credit cards, but also debit cards, gift cards and even those old-fashioned bank checks. Your merchant account will need to be versatile.

Try a local bank first
With all of the merchant account options that you may encounter, you still may want to start with your local bank. This can be tough because banks are increasingly more conservative these days. Before approving a merchant account for credit card processing, a bank representative probably will want to see all sorts of evidence that you are well-established and profitable. But even if the bank decides that somehow you don't qualify, then at least you will have gained some knowledge of the rules involving merchant accounts.

That said, don't let a bank representative intimidate you. Merchant accounts are established in such a manner that when you accept credit card payments, you, not the bank, accept the risk of that payment bouncing. The only risk to the bank is that your enterprise might go bankrupt.

If you don't hook up with a bank, you may establish a merchant account through a third party merchant account agent similar to an independent insurance agent. Then you have to ask yourself if you want to set up your merchant account through multiple sources that may prove more flexible or through a single direct bank source.

Keep your money with automatic transfer
An important service to pursue is automatic transfer. From the point in time when a customer uses a credit card, automatic transfer should provide direct deposit into your merchant account within 48 hours. This means you won't have to remember to transfer these funds, and you won't be allowing someone else to generate earned interest on your revenue.

Your merchant account provider, whether a bank representative or registered agent, should know how to program your merchant account and show you how to operate the technology. It's also important for your representative to affirm a "site survey," which is required before companies such as Visa or MasterCard will approve credit card processing in your enterprise.

You may expect to pay an agent's fee of up to $200 and an application or set-up fee ranging from $50 to $195. Also expect your merchant account provider to charge a fee of about 2 percent of the cash value of each transaction, plus a flat fee of about 25 cents per transaction. Merchant groups have attempted to protest the size of the fees tied to these merchant accounts, to little avail. Your only option is to pass these costs on to your customers. But if a provider suggests a transaction fee of 3 percent or 4 percent and/or a flat fee in the range of $1 per transaction, it's probably time to look elsewhere.

On the cost-saving side, we all know that a good number of business ventures fail, especially during these hard times. Look for used merchant account processing equipment at a discounted price.

Published: May 29,2023