Merchant Account ProvidersBusiness Merchant Account
Posted by admin in Small Business on 22. Jul, 2010 | 0 Comments
Unless you’re the local greengrocer or baker, your company will need a business merchant account. Small businesses who are offered credit card payments only on an irregular basis will be happy with the service their own bank branch can provide, but those whose customers mainly pay with cards, especially internet based businesses, will need to investigate what else is on offer.
Simple Internet Merchant Accounts (IMAs) are offered by ‘merchant acquirers’ – or High Street banks, as they are also known. Payment processing companies provide a similar service tailored for smaller businesses whose main income isn’t through card payments. However, although the growth of these companies has seen their charges fall through increased competition, there can be pitfalls. Although they can be a cheaper alternative to IMAs for some, your money may not make it into your bank account for up to 60 days; your customers may be suspicious that their payments are billed as going to a third party; if cards used to pay for your goods and services, you may have to take out extra insurance to guard you against lost revenue.
The internet has made shopping a lot simpler – with a laptop, you can even shop from bed, although this is a luxury few of us can afford. Running a home-based business, or a small team, means it is vital for customers to be able to pay by debit or credit card. There are different methods that can be used: together or alone they will afford ease of use for your customers.
A basic Merchant Account will allow customers to pay by credit card, whether in person or online. This can offer the advantage of funds instantly transferred to your account, although tiered transactions must be scrutinised and related to your level of transactions to decide what is best for you.
An eCommerce Merchant Account will be dedicated to online payments. This can be satisfyingly economical, as these companies work on the basis of taking a small amount from many transactions and hoping for it to pile up. After all, the more business you do, the more business they do.
Unfortunately, there are no charities dedicated to guiding businesses to the best payment system for them, so you will have to pay somewhere along the way. Cheapest is by doing a lot of research, either on the internet (where you can ask for a tailored quote), or simply by asking friends or similar traders to you if they are happy with the service they service they receive from their provider.
We all love the word ‘free’, but it’s actually a lie because nothing is actually for nothing. Free set-up charges may mean a higher monthly fee or higher percentages taken from your transactions. Free telephone numbers aren’t free – we all know that car insurance companies, for instance, are charging their existing customers for your ‘free’ call; and you if you sign up with them. Some companies will charge you more if your average sale is below a smaller amount, say £5 or £10, which is why you corner shop will refuse to process sales below these amounts.
So switch off the TV and plough through the websites, write it all down, talk to other people in a similar situation. It will only take a couple of hours. And as you are not paying anyone to do this research for you, it comes free.
