How telephone merchant accounts work

How telephone merchant accounts work

Not everyone uses the Internet, at least not yet. A telephone merchant account system helps a business owner reach customers who don't go online or who don't trust making credit card transactions online.

As a business operator, maybe a telephone merchant account sounds old-fashioned to you. Why would you accept credit card payments via a telephone merchant account, when "everyone" does business online these days?

Well, before you scrap the idea of a telephone merchant account, you may wish to consider survey results released in 2009 by the Pew Internet & American Life Project.

The highly reputable Pew organization reports that among Americans in the 70-year-old age range, a full 55 percent say they do not use the Internet. The ratio of non-online folks holds at 38 percent among 60-year-olds, and even 17 percent among 40-year-olds.

That's a whole lot of potential customers who aren't online. If you look really, really hard, maybe you can find one who doesn't use a telephone. Maybe.

Furthermore, even among people who are online, a good number don't trust making purchases or paying bills in that matter. They are concerned about online pirates and would feel much more secure making use of a telephone merchant account that will accept their calls.

Your telephone merchant account system can accept not just credit cards, but it also can accept debit cards and gift cards and even checks. You suddenly will discover an ability to reach customers without ever laying your eyes upon them. Some enterprises have reported that with telephone merchant accounts, they have established a 30 percent increase just in credit card business alone.

Telephone merchant account fees are the key
For all the advantages, you should consider potential pitfalls when you decide whether a telephone merchant account system is right for you. These accounts are considered high risk because the cardholder and the card are not physically present, so beware of high charges.

Options for fees are fixed, usually monthly, or per transaction, usually in the range of about 2 percent plus 25 cents. One-time charges may be assessed for your application and for opening and/or closing the account. Like any good shopper, ask about discounts.

For your telephone merchant account system, you may lease a small credit card processing terminal or connect into a personal computer. The PC can provide extra power and produce top-notch spreadsheets, but it also can be less reliable.

Imagine an infomercial for your business
What type of company should consider a telephone merchant account system? The answer is, virtually any company that makes sales -- but especially retailers who market themselves via general advertising. You may consider a provider that offers a lease agreement, so that you can test the waters with your new or upgraded telephone merchant account system.

You may find yourself lounging on the couch from time to time, watching an infomercial or the Home Shopping Network. These enterprises never see a single one of their customers. They rely entirely on telephone merchant account systems.

Good advice for a business owner: Before making a decision, imagine you are using the telephone merchant account system yourself. Does the telephone merchant account arrangement seem simple and basic for credit card use and for other transactions? Do you feel at ease? Can you accomplish everything simply by using the keypad?

While making things easy for the customer, you also can make things easier for yourself. Your transaction records will be consolidated, your potential for fraud will be greatly reduced, and your orders will be shipped promptly as directed and intended.

Published: March 3,2023