In an ecommerce merchant account, you have to pay certain fees to maintain it. They are the following: discount rates, transaction fees, authorization fees, statement fees, Address Verification Service fees, batch fees, monthly minimum fees, gateway fees, annual fees, charge-back fees, and early termination or cancellation fee.
Having an e-commerce merchant account puts your business on top among all of your competitors. It does not only give convenience to you and your customers but it also increases your business sales, increases your business’ potential to the global market, and invites lots of customers. But with all its advantages to your business, you may also have to deal with plenty of fees just to sustain and operate your merchant account. You often face your account statement every month but couldn’t really figure out where all these high fees are coming from. Knowing the rates and costs is one way to really understand your account. Given below are some fees associated when operating a merchant account:
Discount rates
The discount rates are the fees that merchants have to pay to their providers for accepting credit or debit cards. It is also a commission earned by the merchant account service every time a credit card transaction is processed. Rates vary according to the business’ criterion. It is categorized into qualified discount rate, mid-qualified rate, and non-qualified rate.
Transaction fees
This fee is specifically charged every time a merchant processes a credit card transaction on his merchant account.
Authorization fees
This fee is charged every time a merchant ask for card authorization to the customer’s card-issuing bank. Whether the transactions are approved or not, the fee still applies.
Statement fees
This fee is also termed as the service fee. These are monthly fees that cover the customer service, and print-outs of reports and account statement.
Address verification service fees
When transactions are made and sent to the card-issuing bank, it will pass through a validation system in which it will check if the address and zip code registered by the buyer if it matches to the information he passed to his issuing bank. This is charged every time merchant validates their customers’ cards.
Batch fees
Batch fees, or also called as batch header fees, are flat fees paid for every batch of funds settled in the merchant’s terminal or when the customer’s card-issuing bank has already transferred some funds to the merchant bank as payment.
Monthly minimum fee
There are merchant account providers that require merchants to meet a minimum number of sales every month. If they can’t meet their quota, a monthly minimum fee is charged.
Gateway fees
They are charged each time online merchants use gateway services for online credit card transactions.
Annual fees
Annual fees are charged solely for maintaining the operation of the merchant account. It could also be paid quarterly.
Chargeback fees
These fees are charged every time a merchant have an unsatisfied customer who wants a refund. The merchant would have to pay for the costs of the transaction so that the refund will be delivered back to the customer.
Early termination or cancellation fee
When a merchant avails a merchant account, he will sign a contract that binds him to the merchant account provider for a certain period of time. If he decides to cancel his account or move to another company in less than the agreed span of time, he’ll be asked to pay an early termination or cancellation fee. This would only cover the start-up expenses of the canceled account.
The fees in maintaining a merchant account varies from one provider to the other. To really get the best deal in having a merchant account, read the contract, policies, rates and costs of the company before you sign up.
Showing posts with label Merchant Account. Show all posts
Showing posts with label Merchant Account. Show all posts
Friday, April 2, 2010
Wednesday, March 31, 2010
4 Differences between a Free and a Paid Merchant Account
The differences between a paid and a free merchant account are their basic fees to be paid, the funds’ delivery time, the requirements and most importantly the “catch”.
A merchant’s main concern in choosing a merchant account is one that will suit his needs and fits his budget. Knowing the difference between a free and a paid merchant account is one step to selecting the best merchant account for your business.
Basic fees
The basic fees needed to be paid for users of a paid merchant account are the application fee, setup fee, monthly account fee, and transaction fee. All fees vary from a merchant account provider to another so it is best to inquire from different choices before settling to the one. The application fee is normally paid at the moment you acquire a merchant account. Though, there are some providers that do not charge this kind of fee at all. Another basic fee is the setup fee which covers the establishing of your account and this also includes other bank related issues. Just like the application fee, this is paid just once in the whole duration of your use. Another would be the monthly account fee which is mainly for the maintenance of your merchant account. This rate may vary with each provider or company. There is only one basic fee which is similar to both free and paid merchant account and this is the transaction fee. This is incurred every time a customer buys something from your e-business. In this matter, paid merchant accounts are well off because it generally takes lower charges compared to free merchant accounts. A free merchant account caters to providing the needed software to run this special program for free. Therefore, you won’t be bothered by set-up fees.
Funds delivery time
For free merchant accounts, you have to be patient in waiting for funds to settle in your bank account especially when you are a first-timer and doesn’t have a prominent name in the business yet. But usually, you have to expect your income for at least three to four business days. On the other hand, the funds delivery time for paid merchant account is far quicker compared to the first. Knowing this, you have to weigh whether you will keep a free merchant account with limitations or apply for a paid merchant account where you can manage to pay for the necessary charges and have the advantage of a faster funds delivery time. This will have to be your choice.
Requirements
For a free merchant account, you are not obliged to yield to a credit check and vice versa for the case of paid merchant accounts. Other than this, paid merchant accounts require you a sufficient amount of money to pay for the fees that will be charged on you. But for free merchant accounts, you will only have to keep track of the transaction fee and nothing else.
The “catch”
With all the benefits of a free merchant account, it’s probably intriguing to know the catch. So here it is. Though this kind of application doesn’t cost a set-up fee initially, you are still incurred to some fees which will be taken out from every transaction made. This is quite expected because if otherwise, the merchant provider won’t be earning profit out of its clients. Another drawback is when your merchant account can be temporarily disabled. This is done by your provider because it noticed that you are earning too much money at a certain span of time. They will say that this will benefit both parties. Also, this deactivation is a method to detect fraudulent practices. Nevertheless, when a client is generating more money, his account will start receiving more funds.
Some things to be cautious of when acquiring a paid merchant account is to avoid credit card terminal leases. A sign of this is a company that offers free equipment because there is a large tendency that this is just a rip-off. Be careful of rates that are lower than normal. The odds are the company is exploiting introductory rates that may be non-guaranteed. Lastly, be watchful for early termination fees. Most sales rep will say just about any lie so that you will sign into the contract. So be sure that you won’t be locked with early termination fees so ask.
Now, it ends with a mind-boggling question, ‘Would it be a go for a free merchant account or a paid merchant account?’ Equipped with the differences of both, you have to weigh your needs and budget to get the best kind for your online business.
A merchant’s main concern in choosing a merchant account is one that will suit his needs and fits his budget. Knowing the difference between a free and a paid merchant account is one step to selecting the best merchant account for your business.
Basic fees
The basic fees needed to be paid for users of a paid merchant account are the application fee, setup fee, monthly account fee, and transaction fee. All fees vary from a merchant account provider to another so it is best to inquire from different choices before settling to the one. The application fee is normally paid at the moment you acquire a merchant account. Though, there are some providers that do not charge this kind of fee at all. Another basic fee is the setup fee which covers the establishing of your account and this also includes other bank related issues. Just like the application fee, this is paid just once in the whole duration of your use. Another would be the monthly account fee which is mainly for the maintenance of your merchant account. This rate may vary with each provider or company. There is only one basic fee which is similar to both free and paid merchant account and this is the transaction fee. This is incurred every time a customer buys something from your e-business. In this matter, paid merchant accounts are well off because it generally takes lower charges compared to free merchant accounts. A free merchant account caters to providing the needed software to run this special program for free. Therefore, you won’t be bothered by set-up fees.
Funds delivery time
For free merchant accounts, you have to be patient in waiting for funds to settle in your bank account especially when you are a first-timer and doesn’t have a prominent name in the business yet. But usually, you have to expect your income for at least three to four business days. On the other hand, the funds delivery time for paid merchant account is far quicker compared to the first. Knowing this, you have to weigh whether you will keep a free merchant account with limitations or apply for a paid merchant account where you can manage to pay for the necessary charges and have the advantage of a faster funds delivery time. This will have to be your choice.
Requirements
For a free merchant account, you are not obliged to yield to a credit check and vice versa for the case of paid merchant accounts. Other than this, paid merchant accounts require you a sufficient amount of money to pay for the fees that will be charged on you. But for free merchant accounts, you will only have to keep track of the transaction fee and nothing else.
The “catch”
With all the benefits of a free merchant account, it’s probably intriguing to know the catch. So here it is. Though this kind of application doesn’t cost a set-up fee initially, you are still incurred to some fees which will be taken out from every transaction made. This is quite expected because if otherwise, the merchant provider won’t be earning profit out of its clients. Another drawback is when your merchant account can be temporarily disabled. This is done by your provider because it noticed that you are earning too much money at a certain span of time. They will say that this will benefit both parties. Also, this deactivation is a method to detect fraudulent practices. Nevertheless, when a client is generating more money, his account will start receiving more funds.
Some things to be cautious of when acquiring a paid merchant account is to avoid credit card terminal leases. A sign of this is a company that offers free equipment because there is a large tendency that this is just a rip-off. Be careful of rates that are lower than normal. The odds are the company is exploiting introductory rates that may be non-guaranteed. Lastly, be watchful for early termination fees. Most sales rep will say just about any lie so that you will sign into the contract. So be sure that you won’t be locked with early termination fees so ask.
Now, it ends with a mind-boggling question, ‘Would it be a go for a free merchant account or a paid merchant account?’ Equipped with the differences of both, you have to weigh your needs and budget to get the best kind for your online business.
Monday, March 29, 2010
12 Common Fees You Encounter in Getting a Merchant Account
In opening a merchant account you will come across certain fees that you need to pay on one-time, monthly, annual, and per transaction basis. These are application fee, setup fee, payment gateway fee, monthly statement fee, monthly minimum fee, discount rate, transaction fee, address verification service (AVS) fee, voice authorization fee, charge-back fee, annual fee, and termination fee.
If you want to accept credit cards and other electronic payment forms to increase your sales and profits, you need to open a merchant account. Applying for this type of account involves fees and charges in exchange for the service that merchant account providers give you. Although these costs vary among different providers, here are the common fees you encounter:
Application fee
As the name obviously states, this fee is asked for by the provider when you apply for a merchant account. A percentage of this fee and some other fees may go to the referrer, when applicable, as commission promised in a company’s merchant account affiliate program. Due to heavy competition among providers, most companies do not anymore charge application fees.
Setup fee
This is the initial cost that is asked by certain providers when your account is being set up. Just like the application key, setup fee is now usually very cheap or free for merchants.
Payment gateway fee
To make their package more attractive and less hassle for clients, some merchant account providers tie up with other companies needed by a business to accept credit card payments. An example is payment gateway facility providers. For online businesses, you make use of the payment gateway facility to approve and process credit card transactions over the Internet. If your payment gateway facility is part of your merchant account setup package, applicable fees will be charged by your merchant account provider. On the other hand, if it is separately acquired, fees will be charged directly by your gateway service provider.
Monthly statement fee
This fee is for the processing and preparation of monthly statements. It is fixed regardless of the number of credit card transactions you make in a month.
Monthly minimum fee
Merchant account providers set this minimum or floor amount for the total fees you need to pay monthly. For example, the monthly minimum fee is $30. If all your monthly processing fees, including gateway fee, statement fee, and more, sum up to $25 only, you need to pay additional $5 to reach the monthly minimum fee. If on the other hand your total monthly fee is $35, you do not need to pay additional fee.
Discount rate
This fee can be computed as a percentage of each approved credit card transaction. Usually rates are more expensive for online merchant accounts than retail, due to higher risk and more processes involved.
Transaction fee
Whether a credit card transaction has been approved or declined, merchant account providers charge you this fee for all transactions made. For the same reason as discount rate, transaction fees are higher for online merchants than retail merchants.
Address Verification Service (AVS) fee
Address verification services or AVS is when a credit card transaction is verified using your purchaser’s credit card number and mailing address. This will help you prevent fraudulent purchases when a credit card is not swiped as in a Mail Order or Telephone Order (MOTO), mobile, and online transactions. Because the amount charged is very minimal, some providers include AVS fee in the discount rate or transaction fee.
Voice authorization fee
In rare cases when your software or Point-Of-Sale (POS) terminal is not functioning, you can still process credit card transactions by calling a toll-free number given by your merchant account provider to complete the transaction. The voice authorization fee charged to you will be computed per transaction.
Chargeback fee
Chargeback fee applies when a transaction is reversed and funds are returned to your client for some reason, such as wrong product or service delivered or someone else deceptively used the credit card. You should be able to receive a notification regarding the argument and should respond to it. Chargeback fees charged to you are for the handling of the dispute as well the additional process of returning funds to your clients.
Annual fee
Some providers charge annual fees to their merchant account holders. This is especially applicable with providers that have membership programs offering lower monthly fees, lower transaction fees, and other privileges.
Termination fee
Termination fee is a charge you need to pay when you decide to cancel your merchant account before your contract ends. This is usually fixed regardless of the number of months you have had business with your merchant account provider. This cancellation fee helps your provider recover the losses they might incur with the high initial costs for setting up a merchant account, which are given to you for free or at very low cost.
Aside from these fees, there are also other very minimal costs that merchant account providers require from you during the entire contract, such as daily batch fee and pin debit transactions for POS debit card transactions. Before you apply for a merchant account with a certain provider, always make sure that you know what fees will be charged to you for the specific services they offer at any given time within your contract. Make sure there are no hidden fees that come out after your application has been approved. Make sure you also know and understand what each fee means. There might be some fees that serve the same purpose but are listed separately by the provider to earn more profit from you.
A good way to choose the best merchant account provider is to compare providers with regards to services and fees, as well as customer credibility.
If you want to accept credit cards and other electronic payment forms to increase your sales and profits, you need to open a merchant account. Applying for this type of account involves fees and charges in exchange for the service that merchant account providers give you. Although these costs vary among different providers, here are the common fees you encounter:
Application fee
As the name obviously states, this fee is asked for by the provider when you apply for a merchant account. A percentage of this fee and some other fees may go to the referrer, when applicable, as commission promised in a company’s merchant account affiliate program. Due to heavy competition among providers, most companies do not anymore charge application fees.
Setup fee
This is the initial cost that is asked by certain providers when your account is being set up. Just like the application key, setup fee is now usually very cheap or free for merchants.
Payment gateway fee
To make their package more attractive and less hassle for clients, some merchant account providers tie up with other companies needed by a business to accept credit card payments. An example is payment gateway facility providers. For online businesses, you make use of the payment gateway facility to approve and process credit card transactions over the Internet. If your payment gateway facility is part of your merchant account setup package, applicable fees will be charged by your merchant account provider. On the other hand, if it is separately acquired, fees will be charged directly by your gateway service provider.
Monthly statement fee
This fee is for the processing and preparation of monthly statements. It is fixed regardless of the number of credit card transactions you make in a month.
Monthly minimum fee
Merchant account providers set this minimum or floor amount for the total fees you need to pay monthly. For example, the monthly minimum fee is $30. If all your monthly processing fees, including gateway fee, statement fee, and more, sum up to $25 only, you need to pay additional $5 to reach the monthly minimum fee. If on the other hand your total monthly fee is $35, you do not need to pay additional fee.
Discount rate
This fee can be computed as a percentage of each approved credit card transaction. Usually rates are more expensive for online merchant accounts than retail, due to higher risk and more processes involved.
Transaction fee
Whether a credit card transaction has been approved or declined, merchant account providers charge you this fee for all transactions made. For the same reason as discount rate, transaction fees are higher for online merchants than retail merchants.
Address Verification Service (AVS) fee
Address verification services or AVS is when a credit card transaction is verified using your purchaser’s credit card number and mailing address. This will help you prevent fraudulent purchases when a credit card is not swiped as in a Mail Order or Telephone Order (MOTO), mobile, and online transactions. Because the amount charged is very minimal, some providers include AVS fee in the discount rate or transaction fee.
Voice authorization fee
In rare cases when your software or Point-Of-Sale (POS) terminal is not functioning, you can still process credit card transactions by calling a toll-free number given by your merchant account provider to complete the transaction. The voice authorization fee charged to you will be computed per transaction.
Chargeback fee
Chargeback fee applies when a transaction is reversed and funds are returned to your client for some reason, such as wrong product or service delivered or someone else deceptively used the credit card. You should be able to receive a notification regarding the argument and should respond to it. Chargeback fees charged to you are for the handling of the dispute as well the additional process of returning funds to your clients.
Annual fee
Some providers charge annual fees to their merchant account holders. This is especially applicable with providers that have membership programs offering lower monthly fees, lower transaction fees, and other privileges.
Termination fee
Termination fee is a charge you need to pay when you decide to cancel your merchant account before your contract ends. This is usually fixed regardless of the number of months you have had business with your merchant account provider. This cancellation fee helps your provider recover the losses they might incur with the high initial costs for setting up a merchant account, which are given to you for free or at very low cost.
Aside from these fees, there are also other very minimal costs that merchant account providers require from you during the entire contract, such as daily batch fee and pin debit transactions for POS debit card transactions. Before you apply for a merchant account with a certain provider, always make sure that you know what fees will be charged to you for the specific services they offer at any given time within your contract. Make sure there are no hidden fees that come out after your application has been approved. Make sure you also know and understand what each fee means. There might be some fees that serve the same purpose but are listed separately by the provider to earn more profit from you.
A good way to choose the best merchant account provider is to compare providers with regards to services and fees, as well as customer credibility.
Monday, March 22, 2010
Difference Between a Merchant Account and Paypal
Merchant account is a special type of bank account that allows businesses to accept and process payments through your chosen bank account while, Paypal whose purpose is basically the same as that of the merchant account; however, it uses someone else's account to process your transactions.
In general, both the Merchant account and the Paypal differ in several aspects like the type of business, number of transaction, speed of approval and cost. To help you decide, pros and cons must be carefully evaluated before acquiring an account.
Merchant account
A merchant account is an agreement between a merchant bank and the merchant for settlement of online transactions, which is also known as payment processing or credit card processing. When a merchant makes a sale, sales will be deposited to his chosen account. The same thing applies when a refund transaction is made, funds will be withdrawn from the merchant's account. Although merchant account is difficult to acquire, it has some advantages that proved to be useful for your business namely:
* Handles transfer of funds from the customer to the merchant's bank account faster and safer
* All transactions are secured by the Federal banking regulations
Type of business
The type of business a merchant account accepts is a real business that has established physical stores, which have lower risk and lesser chances of fraud.
Number of transaction
Merchant account prefers higher volume transactions and on a regular basis.
Speed of approval
Most merchant accounts are difficult to acquire. Several supporting documents are needed and verified before one can successfully get an account. It is an advantage if you get a merchant account with a bank that you have an existing transaction with.
Cost
A regular monthly fee will be charged to the merchant's account whether or not a transaction has been completed.
Paypal
As a third party processor, Paypal allows you to send and receive online payments. Getting a Paypal account is easier compared to a merchant account. One can also leave or discontinue the account anytime without any obligation. Like the merchant account, Paypal also has some advantages such as:
* Allows you to send money without revealing your credit card details and bank account information
* Does not have limit on volume of transaction
Type of business
Those businesses that don't qualify for merchant account application like high risk business, bad credit record, or small and newly opened business are readily accepted at Paypal.
Number of transaction
Paypal does not require a minimum volume of transaction; however, it would be cheaper to have it in bulk per transaction.
Speed of approval
A Paypal account allows easy application and approval for any type of business including those considered high risk. All you need to do is apply online by supplying your personal information as well as your credit card details.
Cost
You don't have to worry about the costs and fees since Paypal charges on a per transaction basis only. Clients are not obliged to pay monthly dues and other charges when there is no transaction conducted.
Before deciding what type of account you will get for you business, first you need to weigh things including the advantages and disadvantages. You can also research more about the types of accounts to help you understand better about their differences.
If you are just trying out or starting an online store, better get a PayPal account. But if you are really serious with your online business and monthly sales are dramatically increasing, then merchant account might just be the best option. It will cost you less in the long run.
In general, both the Merchant account and the Paypal differ in several aspects like the type of business, number of transaction, speed of approval and cost. To help you decide, pros and cons must be carefully evaluated before acquiring an account.
Merchant account
A merchant account is an agreement between a merchant bank and the merchant for settlement of online transactions, which is also known as payment processing or credit card processing. When a merchant makes a sale, sales will be deposited to his chosen account. The same thing applies when a refund transaction is made, funds will be withdrawn from the merchant's account. Although merchant account is difficult to acquire, it has some advantages that proved to be useful for your business namely:
* Handles transfer of funds from the customer to the merchant's bank account faster and safer
* All transactions are secured by the Federal banking regulations
Type of business
The type of business a merchant account accepts is a real business that has established physical stores, which have lower risk and lesser chances of fraud.
Number of transaction
Merchant account prefers higher volume transactions and on a regular basis.
Speed of approval
Most merchant accounts are difficult to acquire. Several supporting documents are needed and verified before one can successfully get an account. It is an advantage if you get a merchant account with a bank that you have an existing transaction with.
Cost
A regular monthly fee will be charged to the merchant's account whether or not a transaction has been completed.
Paypal
As a third party processor, Paypal allows you to send and receive online payments. Getting a Paypal account is easier compared to a merchant account. One can also leave or discontinue the account anytime without any obligation. Like the merchant account, Paypal also has some advantages such as:
* Allows you to send money without revealing your credit card details and bank account information
* Does not have limit on volume of transaction
Type of business
Those businesses that don't qualify for merchant account application like high risk business, bad credit record, or small and newly opened business are readily accepted at Paypal.
Number of transaction
Paypal does not require a minimum volume of transaction; however, it would be cheaper to have it in bulk per transaction.
Speed of approval
A Paypal account allows easy application and approval for any type of business including those considered high risk. All you need to do is apply online by supplying your personal information as well as your credit card details.
Cost
You don't have to worry about the costs and fees since Paypal charges on a per transaction basis only. Clients are not obliged to pay monthly dues and other charges when there is no transaction conducted.
Before deciding what type of account you will get for you business, first you need to weigh things including the advantages and disadvantages. You can also research more about the types of accounts to help you understand better about their differences.
If you are just trying out or starting an online store, better get a PayPal account. But if you are really serious with your online business and monthly sales are dramatically increasing, then merchant account might just be the best option. It will cost you less in the long run.
Thursday, March 18, 2010
3 Superb Features of Merchant Account to Make Your Business Grow
A merchant account allows any business to accept credit cards or debit cards as modes of payment. This type of bank account provides convenience to both the sellers and the consumers, increases sales, keeps you on track on all of your transactions, increases customers, and pays you almost instantly.
Business owners will have to join any marketing strategy to keep up with their competitors if they want their business to survive. One sure way to do this is by establishing merchant accounts. This is a type of bank account that will provide a more flexible way for customers to pay and that is by accepting credit or debit cards. You can avail this at your local banks or from any online merchant account providers.
Acquiring a merchant account will also give tons of benefits to your business and they are stated below:
Provides convenience to both the seller and consumer
Customers greatly prefer to carry their cards than take the risk of bringing along cash wherever they go while visiting stores. This greatly lessens any chances of theft. Sellers are also saved from the hassle of dealing with manual transactions and reports, and from taking money in and out of the bank.
Increases sales
Consumers will be more allured to buy your products because with just a swipe, they can purchase anything they want no matter how expensive they are. Credit cards give your customers little time to think. This is because, whether they have enough amounts in their pockets, they can use their credit cards on either choice. Most shopaholics would usually give in to the desire and need of that certain product and worry for the pay check later.
Keeps you on track on all of your transactions
With a merchant account, you can now easily follow the flow of all your business transactions. No don’t have to stock tons of paperwork and receipts because with a simple account statement, everything will be in place only for you to check.
Increases customers
With a merchant account, you’ll be able to attract more customers especially now that you have given them an easier method to pay. You will also have the chance to gain international customers as you venture into online selling.
Pays you almost instantly
With checks or C.O.D's, it will take weeks to get paid. But when you start accepting credit card payments, after orders are processed, your account will filled with the payments you earned in just a day or two.
To maintain the contentment of one’s consumers and the improvement in sales and proceeds, it is highly advised that a business avails the credit card purchasing system. Lesser customers prefer cash over credit cards, and checks are not a stable and not a reliable method. These may lose you the chance of earning. Without a doubt, and for you and your customers’ advantage, avail the merchant account now.
Business owners will have to join any marketing strategy to keep up with their competitors if they want their business to survive. One sure way to do this is by establishing merchant accounts. This is a type of bank account that will provide a more flexible way for customers to pay and that is by accepting credit or debit cards. You can avail this at your local banks or from any online merchant account providers.
Acquiring a merchant account will also give tons of benefits to your business and they are stated below:
Provides convenience to both the seller and consumer
Customers greatly prefer to carry their cards than take the risk of bringing along cash wherever they go while visiting stores. This greatly lessens any chances of theft. Sellers are also saved from the hassle of dealing with manual transactions and reports, and from taking money in and out of the bank.
Increases sales
Consumers will be more allured to buy your products because with just a swipe, they can purchase anything they want no matter how expensive they are. Credit cards give your customers little time to think. This is because, whether they have enough amounts in their pockets, they can use their credit cards on either choice. Most shopaholics would usually give in to the desire and need of that certain product and worry for the pay check later.
Keeps you on track on all of your transactions
With a merchant account, you can now easily follow the flow of all your business transactions. No don’t have to stock tons of paperwork and receipts because with a simple account statement, everything will be in place only for you to check.
Increases customers
With a merchant account, you’ll be able to attract more customers especially now that you have given them an easier method to pay. You will also have the chance to gain international customers as you venture into online selling.
Pays you almost instantly
With checks or C.O.D's, it will take weeks to get paid. But when you start accepting credit card payments, after orders are processed, your account will filled with the payments you earned in just a day or two.
To maintain the contentment of one’s consumers and the improvement in sales and proceeds, it is highly advised that a business avails the credit card purchasing system. Lesser customers prefer cash over credit cards, and checks are not a stable and not a reliable method. These may lose you the chance of earning. Without a doubt, and for you and your customers’ advantage, avail the merchant account now.
Wednesday, March 17, 2010
6 Fundamental Requirements in Opening a Free Merchant Account for a Hassle-free Application
In opening a free merchant account, you have to prepare requirements such as merchant account application and agreement; valid identification documents; financial statements; business documents; Website; and payment gateway.
A free merchant account is the perfect solution for most merchants who like to start accepting credit card payments. Acquiring a free merchant account is very easy as long as you meet all the requirements the bank or merchant account provider wanted.
Merchant account application and agreement
The foremost requirement in opening a free merchant account is to submit an accomplished application form. This paper contains your personal data such as name, place of residence, contact numbers and business data. You also have to attach pictures of yourself. A tax identification number and SSS are also required for proper identification as the business proprietor. Application forms differ on each merchant bank. You have to fill them up according to their satisfaction and the checking of the establishment.
Valid identification documents
Be equipped with any valid identification documents such as passport, driver’s license, voter’s ID and such. This is to ensure that no fraud is taking place.
Financial statements
Just like you are, companies that provide merchant accounts need to ensure the validity of each application. So, they will ask for your business’ financial statements. This will confirm that you are capable of paying the fees on due time and that you are in good terms with your bank or any financial institute. If your business is going on for a few years now, you have to provide the business financial statement after at least two years of service. If not then, your personal financial statement and personal tax will do. Moreover, you have to present the cash flow details, the probable average online transaction rates and the estimated conversion value.
Business documents
Documents such as your business license, seller’s permit, tax seller’s permit, and documents of incorporation are needed to open a merchant account. You must also present a voided copy of a bank account check where your money is set down. This check must have the “Doing Business As” (DBA). You also have to provide the business phone number and registered business address. This mustn’t be a P.O. Box address.
Website
Since a merchant account is applicable for online businesses, you have to give the company a URL of your valid and active website. Make sure that your website is professional-looking and has the vital policies of deliver, and secured checkout system and other fees. Verify if the domain you have is legal and accessible and it must be registered with you as the legal owner.
Payment gateway
Before applying for a merchant account, you must already have a payment gateway for your business. This is the main objective of acquiring a merchant account as it will provide assistance in the transactions done between the customer and you. It will make it easier for you to trace the due payments from your customers and clients.
The most essential qualification for opening a credit card merchant account is to meet the requirements of the bank you are applying to. There are industries called processors that help in this task. You may choose from personally going to the bank or the gate processor.
A free merchant account is the perfect solution for most merchants who like to start accepting credit card payments. Acquiring a free merchant account is very easy as long as you meet all the requirements the bank or merchant account provider wanted.
Merchant account application and agreement
The foremost requirement in opening a free merchant account is to submit an accomplished application form. This paper contains your personal data such as name, place of residence, contact numbers and business data. You also have to attach pictures of yourself. A tax identification number and SSS are also required for proper identification as the business proprietor. Application forms differ on each merchant bank. You have to fill them up according to their satisfaction and the checking of the establishment.
Valid identification documents
Be equipped with any valid identification documents such as passport, driver’s license, voter’s ID and such. This is to ensure that no fraud is taking place.
Financial statements
Just like you are, companies that provide merchant accounts need to ensure the validity of each application. So, they will ask for your business’ financial statements. This will confirm that you are capable of paying the fees on due time and that you are in good terms with your bank or any financial institute. If your business is going on for a few years now, you have to provide the business financial statement after at least two years of service. If not then, your personal financial statement and personal tax will do. Moreover, you have to present the cash flow details, the probable average online transaction rates and the estimated conversion value.
Business documents
Documents such as your business license, seller’s permit, tax seller’s permit, and documents of incorporation are needed to open a merchant account. You must also present a voided copy of a bank account check where your money is set down. This check must have the “Doing Business As” (DBA). You also have to provide the business phone number and registered business address. This mustn’t be a P.O. Box address.
Website
Since a merchant account is applicable for online businesses, you have to give the company a URL of your valid and active website. Make sure that your website is professional-looking and has the vital policies of deliver, and secured checkout system and other fees. Verify if the domain you have is legal and accessible and it must be registered with you as the legal owner.
Payment gateway
Before applying for a merchant account, you must already have a payment gateway for your business. This is the main objective of acquiring a merchant account as it will provide assistance in the transactions done between the customer and you. It will make it easier for you to trace the due payments from your customers and clients.
The most essential qualification for opening a credit card merchant account is to meet the requirements of the bank you are applying to. There are industries called processors that help in this task. You may choose from personally going to the bank or the gate processor.
Tuesday, March 16, 2010
3 Helpful Tips for Companies with Bad Credit History in Applying for a Merchant Account
Even if you have a bad credit history or standing, you can still apply and be approved of a merchant account. To increase your chance of being approved, you need to clear your bad credit records and look for merchant account providers that cater to companies with bad credit history. In addition, you need to compare providers’ products, services, and specific guidelines regarding the credit and financial aspects.
In order to increase sales and improve profitability, you need to open a merchant account that enables you to accept credit card payments for your business. However, if you have a bad credit history, you might find it hard to be approved of a merchant account because of the higher financial risks involved in providers, especially with regards to chargebacks and the proliferation of fraud. To help you open a merchant account even with bad credit, consider the following useful tips:
Clear your bad credit records
To increase your chance of being approved for your merchant account application, you need to improve your credit standing. There are certain credit information agencies that do the research and monitoring of credit standings, such as Experian, TransUnion, and Equifax. These bureaus are the sources of credit reports that merchant account providers use in evaluating their applicants. Once your credit issues have been resolved and settled, you need to inform these institutions so that the bad credit record you have will be cleared, thus improving your credit standing and increasing your chance of being approved with your merchant account application. If you are under the state of bankruptcy, you are required to wait for six months after being cleared of such condition before you can request these institutions to remove such credit information.
Look for merchant account providers that cater to companies with bad credit history
Some merchant account providers are more compliant with applicants that possess imperfect credit background as they understand that it is normal for companies to sometimes incur late payments as well as overdue debt and loan payments. As long as these instances were not repeatedly or excessively listed in the credit report, some providers still allow you to set up a merchant account. Just as long as you have not also been involved in serious cases of bad credit history, such as bankruptcy, you have a good chance of getting your business a merchant account. Just look for these providers, without having the need to spend a lot of your time inquiring over merchant account providers known to be strict with credit history. Banks, for example, are known to disapprove applicants with poor credit history as they are governed by more stringent measures concerning risk and fraud management. Banks, being vital financial institutions, need to minimize the risk of having to incur more costs due to poor performing or fraudulent clients. Merchant account providers, on the other hand, whose main business is to set up a merchant account, would always find a way to increase their sales and cater to the needs of their market, thus making them more compliant in approving applications. Examples of these providers include National Merchant Bancard at Sunvirtual.com, Freeauthnet.com, and Total Merchant Services, among others.
Compare providers’ products, services, and specific guidelines regarding the credit and financial aspects
Always included in the process of choosing a merchant account provider is to make a comparison of their products, services, and costs. Since you are opening a merchant account under a different condition, that is having an imperfect credit history, is it important to pay attention to certain costs that may differ among providers. Chargeback costs and penalties may be higher in this case. Aside from costs, providers may set a different condition in handling chargebacks. Merchant account providers usually hold a certain amount in your merchant account in order to secure them of your payment in case the need for a chargeback arises and to avoid the proliferation of fraudulent activities.
To make things clear for you, when a chargeback takes place or when a need to refund an unsatisfied customer happens, the sum of money is taken from your merchant account. In case you have insufficient funds in your account, the merchant account processors temporarily have the burden of refunding the customer, thus the need for additional chargeback fees aside from the cost involved in the processing of the chargeback. Your due balance will then be collected when funds are already available in your account. The risk comes in now, especially when it takes longer time for your company to cover the chargeback, affecting the financial operations of the merchant account provider. Imagine their losses if many companies have insufficient funds in their merchant accounts. To address this problem, merchant account providers settle for a hold amount in your merchant account to cover possible chargebacks. The amount is said to be computed based on a certain percentage of your monthly sales and released in three to six months time.
As long as you do your part in correcting your bad credit history and you deal with the right merchant account provider that answers your needs, you can very well be approved of a merchant account. Soon, you will be ready to accept credit cards and other electronic forms of payment that will help boost your business and make it more profitable.
In order to increase sales and improve profitability, you need to open a merchant account that enables you to accept credit card payments for your business. However, if you have a bad credit history, you might find it hard to be approved of a merchant account because of the higher financial risks involved in providers, especially with regards to chargebacks and the proliferation of fraud. To help you open a merchant account even with bad credit, consider the following useful tips:
Clear your bad credit records
To increase your chance of being approved for your merchant account application, you need to improve your credit standing. There are certain credit information agencies that do the research and monitoring of credit standings, such as Experian, TransUnion, and Equifax. These bureaus are the sources of credit reports that merchant account providers use in evaluating their applicants. Once your credit issues have been resolved and settled, you need to inform these institutions so that the bad credit record you have will be cleared, thus improving your credit standing and increasing your chance of being approved with your merchant account application. If you are under the state of bankruptcy, you are required to wait for six months after being cleared of such condition before you can request these institutions to remove such credit information.
Look for merchant account providers that cater to companies with bad credit history
Some merchant account providers are more compliant with applicants that possess imperfect credit background as they understand that it is normal for companies to sometimes incur late payments as well as overdue debt and loan payments. As long as these instances were not repeatedly or excessively listed in the credit report, some providers still allow you to set up a merchant account. Just as long as you have not also been involved in serious cases of bad credit history, such as bankruptcy, you have a good chance of getting your business a merchant account. Just look for these providers, without having the need to spend a lot of your time inquiring over merchant account providers known to be strict with credit history. Banks, for example, are known to disapprove applicants with poor credit history as they are governed by more stringent measures concerning risk and fraud management. Banks, being vital financial institutions, need to minimize the risk of having to incur more costs due to poor performing or fraudulent clients. Merchant account providers, on the other hand, whose main business is to set up a merchant account, would always find a way to increase their sales and cater to the needs of their market, thus making them more compliant in approving applications. Examples of these providers include National Merchant Bancard at Sunvirtual.com, Freeauthnet.com, and Total Merchant Services, among others.
Compare providers’ products, services, and specific guidelines regarding the credit and financial aspects
Always included in the process of choosing a merchant account provider is to make a comparison of their products, services, and costs. Since you are opening a merchant account under a different condition, that is having an imperfect credit history, is it important to pay attention to certain costs that may differ among providers. Chargeback costs and penalties may be higher in this case. Aside from costs, providers may set a different condition in handling chargebacks. Merchant account providers usually hold a certain amount in your merchant account in order to secure them of your payment in case the need for a chargeback arises and to avoid the proliferation of fraudulent activities.
To make things clear for you, when a chargeback takes place or when a need to refund an unsatisfied customer happens, the sum of money is taken from your merchant account. In case you have insufficient funds in your account, the merchant account processors temporarily have the burden of refunding the customer, thus the need for additional chargeback fees aside from the cost involved in the processing of the chargeback. Your due balance will then be collected when funds are already available in your account. The risk comes in now, especially when it takes longer time for your company to cover the chargeback, affecting the financial operations of the merchant account provider. Imagine their losses if many companies have insufficient funds in their merchant accounts. To address this problem, merchant account providers settle for a hold amount in your merchant account to cover possible chargebacks. The amount is said to be computed based on a certain percentage of your monthly sales and released in three to six months time.
As long as you do your part in correcting your bad credit history and you deal with the right merchant account provider that answers your needs, you can very well be approved of a merchant account. Soon, you will be ready to accept credit cards and other electronic forms of payment that will help boost your business and make it more profitable.
Sunday, March 14, 2010
5 Effective Ways in Getting Better Merchant Account Processing Fees
To get better processing fees on your merchant account, you must research as much merchant account providers as you can. You also need to read and solicit customer feedback and reviews, do a comparison of reliable providers, ask for quotations, and limit the services you avail to your needs.
Making your business more profitable does not only involve finding ways to increase your sales. It also entails applying cost-effective means, such as getting better merchant account processing fees, to maximize your profits. Here are effective ways that help you obtain better processing fees on your merchant account:
Research as much merchant account providers as you can
A good way to start choosing the most cost-effective merchant account provider is to do a research. Gather as much merchant account providers as you can on the Internet so you will have more providers to choose from. Learn the relevant information, such as products and services they offer and their related processing costs.
Read and solicit customer feedback and reviews
In order to save time from going over many merchant account providers and reducing the risk of dealing with fraudulent providers, it is advisable to go over customer feedback and reviews. Look for merchant account providers that are known for giving retailers the best deals in the industry. Search for providers with a good reputation on pricing their clients, without misleading you with low introduction costs, but higher processing fees. A website that helps you provide such useful information includes credit-card-processing-review.toptenreviews.com. You can also ask opinions from other retailers regarding their merchant account processing experience.
Do a comparison of reliable providers
After you get ideas on which merchant account providers are reliable, you need to compare their services and their fees. Find out which provider gives the best deals by outlining the standard and value-added services as well as the different costs involved. You can again go to credit-card-processing-review.toptenreviews.com to help you with this task or cardfellow.com and other similar websites. If you see considerable differences in certain merchant account processing fees, do not assume instantaneously that a certain provider is expensive or cheap; rather, find out what makes the certain fee more expensive or cheaper. In other words, know the nature of the costs involved. This also helps you avoid being deceived by providers who significantly offer lower fees, but lists additional fees that are of exact nature to fees already included.
Ask for quotations
Before you decide which merchant account provider to deal with, narrow down your choices first and ask for quotations from these providers. In doing so, do not forget to identify the type and size of business you have. Rates are usually cheaper for smaller and less-risky businesses. Again, always ask about the nature of the costs involved if some are not clear to you. Inquire about possible rate increases in the later years of service as your deal usually involves a long-term contract. There are actually some providers who advertise very low rates, but increase their rates later on within your contract. Finally, do not forget to state other providers’ rates as other companies lower their fees in order to compete and win customers.
Limit the services you avail to your needs
The final and one of the most important ways to get better merchant account processing fees is to make sure that you only avail of the services that your business really needs. There are merchant account processors that offer bundles of services for cheaper rates. In the end, they may come out more expensive for you as you are not able to really make use of the other services you are paying for. Always compare the products and services that a certain merchant account provider offers with the services you really need before dealing with them. This helps you minimize your expenses and fully utilize their services. Another piece of advice, do not go for an offshore type of merchant account if your business is small and you intend to cater to local clients only. This type of merchant account gives you added services, such as allowing acceptance of multiple payment currencies, which would be impractical and expensive for your business.
Merchant account fees can really be made cheaper if you just know what your business actually needs and you have enough knowledge in the costs involved as well as the bargaining ability. In effect, your business would be more profitable aside from increased sales brought about by the acceptance of credit cards and other electronic payment forms.
Making your business more profitable does not only involve finding ways to increase your sales. It also entails applying cost-effective means, such as getting better merchant account processing fees, to maximize your profits. Here are effective ways that help you obtain better processing fees on your merchant account:
Research as much merchant account providers as you can
A good way to start choosing the most cost-effective merchant account provider is to do a research. Gather as much merchant account providers as you can on the Internet so you will have more providers to choose from. Learn the relevant information, such as products and services they offer and their related processing costs.
Read and solicit customer feedback and reviews
In order to save time from going over many merchant account providers and reducing the risk of dealing with fraudulent providers, it is advisable to go over customer feedback and reviews. Look for merchant account providers that are known for giving retailers the best deals in the industry. Search for providers with a good reputation on pricing their clients, without misleading you with low introduction costs, but higher processing fees. A website that helps you provide such useful information includes credit-card-processing-review.toptenreviews.com. You can also ask opinions from other retailers regarding their merchant account processing experience.
Do a comparison of reliable providers
After you get ideas on which merchant account providers are reliable, you need to compare their services and their fees. Find out which provider gives the best deals by outlining the standard and value-added services as well as the different costs involved. You can again go to credit-card-processing-review.toptenreviews.com to help you with this task or cardfellow.com and other similar websites. If you see considerable differences in certain merchant account processing fees, do not assume instantaneously that a certain provider is expensive or cheap; rather, find out what makes the certain fee more expensive or cheaper. In other words, know the nature of the costs involved. This also helps you avoid being deceived by providers who significantly offer lower fees, but lists additional fees that are of exact nature to fees already included.
Ask for quotations
Before you decide which merchant account provider to deal with, narrow down your choices first and ask for quotations from these providers. In doing so, do not forget to identify the type and size of business you have. Rates are usually cheaper for smaller and less-risky businesses. Again, always ask about the nature of the costs involved if some are not clear to you. Inquire about possible rate increases in the later years of service as your deal usually involves a long-term contract. There are actually some providers who advertise very low rates, but increase their rates later on within your contract. Finally, do not forget to state other providers’ rates as other companies lower their fees in order to compete and win customers.
Limit the services you avail to your needs
The final and one of the most important ways to get better merchant account processing fees is to make sure that you only avail of the services that your business really needs. There are merchant account processors that offer bundles of services for cheaper rates. In the end, they may come out more expensive for you as you are not able to really make use of the other services you are paying for. Always compare the products and services that a certain merchant account provider offers with the services you really need before dealing with them. This helps you minimize your expenses and fully utilize their services. Another piece of advice, do not go for an offshore type of merchant account if your business is small and you intend to cater to local clients only. This type of merchant account gives you added services, such as allowing acceptance of multiple payment currencies, which would be impractical and expensive for your business.
Merchant account fees can really be made cheaper if you just know what your business actually needs and you have enough knowledge in the costs involved as well as the bargaining ability. In effect, your business would be more profitable aside from increased sales brought about by the acceptance of credit cards and other electronic payment forms.
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