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Merchant Account Card Processing - The Benefits of Using a Merchant Account

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By definition, a merchant account is the development of a business connection between a vendor and a bank to design a system through which credit cards, debit cards and electronic payments are accepted. Merchant accounts employ a payment gateway which in turn is linked to a shopping cart program that enables customers to purchase or make a payment for goods or services online. Companies can apply for a merchant account through a bank, a financial institution, or through an independent sales organization (ISO). In order to set up an account that is favorable to the user, the bank, financial institution or ISO has to gain an understanding of the merchant’s business and what their underlying needs or challenges are so that the system created focuses on their client’s business requirements.

If a business can proof its sales history, then it should apply for a merchant account through a financial institution or bank, such as JPMorgan Chase and Bank of America. In addition to already having a sales history, banking institutions look at certain factors before considering if a business relationship with a company is feasible. The following is a list of some points the banks analyze:

• The actual and estimated sales volume on a monthly basis
• The type of cards the business currently welcomes or hopes to accept in the future
• The credibility of the business
• What kind of goods or services the company markets to its customers

If a company cannot provide proof of sales history or does not meet requirements for a merchant account, then using an ISO is their best option. The ISO serves as a middleman between the company and bank as a result a higher fee is charged for their services.

Having a merchant card processing account means that you will be incurring charges for the services being provided to you. Initiating a merchant account may be time consuming and expensive, but in the long term it is cheaper especially when compared to third party processing units like PayPal. The amount you pay in fees is based upon some of the following situations like: the type of business you are involve in, the number of sales processed monthly and the provider you choose to do business with. The regular fees associated with a merchant account can range from a monthly or annual maintenance fee, a transaction fee, an authorization fee, a set up fee, and an annual membership fee to name a few. When you are choosing an option for your merchant account card processing service, select one that is compatible with the attributes of your e-Commerce business. Cheaper does not always mean better. One thing to note is whether the equipment used for processing online payment is included in the services being proposed or is a separate charge. Do your research to ensure that you are using a provider that is reputable and offers valuable services. Examine all your choices to ensure that you pick a bank or financial institution that provides services that will be advantageous to your corporation now and in the future. Since opening a merchant account can be an asset to online businesses, be wary of providers that are charging extravagant prices and hidden fees.

To remain competitive these days, doing business online is vital because it helps to broaden your customer base. A merchant account for card processing means that an organization can accept payments from various credit cards and in all types of currency from customers worldwide. Another benefit of having a merchant account is that it saves you time and money. With the technology that is available presently, credit and debit card transactions are approved instantly over a secure browser. This enables customers to look at current and immediate updates to their accounts. Companies no longer have to wait to only receive a payment via the mail. Not having the capability to accept credit or debit cards online can seriously damage your business. By setting up merchant accounts on their website, businesses are boosting their sales by an enormous margin. Customers like websites that are easy to navigate, keep customers personal information secure and make the payment process manageable.

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about 6 years ago

Great article will bookmark it for reference. Thanks.