If you are a merchant doing business online, you must have a merchant account. Virtually every transaction made online involves a credit card. Without a merchant account to back and support you, you could easily get burned out in the credit card business.
Not make mistakes. Credit cards are big business. In the United States in 2003, there were only 21 billion transactions, totaling $1.4 trillion. Five years later, that number rose to 26.5 billion credit card transactions, totaling $2.1 trillion in sales. In 2009, that figure was $2.5 trillion in business at more than 24 million locations worldwide.
If you are an online merchant, you need a merchant account so you can safely get your share of that trillion dollar pie.
For a fee, or a percentage of the sale, a merchant account will process your customers’ online payments. You may think, “The lower the rate, the more money will be in my bank account,” but that’s not the only way to judge a system. After all, a good merchant account will do more than process your transaction.
Yes, your merchant account will process your credit card orders as well as purchases with a debit card. But to do that, you need the best credit card processing equipment for your business. It must also comply with payment card industry standards. You also have to worry about technical support. If your equipment fails, your business could too. So no matter what business you’re in, take the time to explore merchant accounts and find one that will help you build your business.
Here are some questions to ask:
· What is the level of customer service? As an online merchant, you are open 24/7. Is your merchant account going to answer the phone after 5 pm?
· Does the service have the latest fraud detection tools necessary to protect it?
· What is the level of customer service? If it’s not superior, why use that service?
· What major credit cards will you be able to accept? VISA and MasterCard? Sure. Purpose American Express and Discover? And what about electronic checks and gift cards?
· Will the service validate your payments instantly? That’s important, especially if urgent shipping is requested.
How long will it take for payments to clear and deposit into your account? If you’re a small business, you need your money fast.
How will the merchant account store sensitive information? Are your data centers PCI compliant?
Although most transactions will be made with major credit cards, there are other options that merchants should consider. Your clients might also be interested in using:
PayPal. This popular service enables global trade. It’s a fast and secure way to pay and receive payments online, allowing members to send money without sharing financial information.
· Gift cards. These prepaid cards are often a boon to retailers, especially as the holiday season draws to a close. Some online merchants reported 12-fold increases in gift card sales between Black Friday and Christmas Eve.
Store-branded cards. Not all online businesses are at the point where they can offer store-branded cards, but it’s something to consider.
By using a merchant account for your business, you are introducing advantages for yourself and your customers. Consider:
· Business accounts offer your customers alternative payment options.
· With some options, your customers can delay payments.
· Each payment method provides your customers with different security features, such as safeguards to prevent misuse of your payment information or keep your identity hidden.
So how do you choose the right merchant account system? Here are some issues to consider:
· When you enter your customer’s credit card information, you will pay a higher processing fee. By using a wireless terminal to swipe your payment card, you’ll pay a significantly lower processing cost. If you are strictly an online merchant, this is not an option, but many merchants offer both.
· It is critical, and bears repeating, that you choose a wireless credit card processing system that is PCI compliant and offers sophisticated encryption technology. This means you’ll be able to accept payments with less worry. (PCI compliance regulates how cardholder information is kept safe from theft. A PCI-compliant credit card terminal does not retain cardholder information after the merchant submits it for payment ).
As an online merchant, you are on the right track. Right now, 63 percent of shoppers in the United States shop online. As people get used to the system, that number is expected to rise to 78 percent by 2014. Put your business in the best possible position to take advantage of that business by opening a business account.