Credit cards are practically ubiquitous in today's bustling and efficient marketplace, providing much quicker service and greater flexibility than cash. However, the simplicity of using a credit card belies the complicated reality of the actual payment process. Because of this complexity and the potential for mistakes or fraud, the application process to set up a merchant account can be quite lengthy and involved as well.
If you think a merchant account might be a good choice for your growing business, take a few moments to learn the basics of how they work as well as some ways in which they can help your business stand head and shoulders above the competition.
Charging Credit Cards at Your Storefront
One of the quickest, simplest and most familiar applications of a merchant account can be used by business owners with a physical storefront or point of sale. A retail merchant account involves the use of a credit card terminal connected to the Internet to instantly process payments by swiping credit cards. This type of account offers the cheapest rates of the three major types of accounts because it is considered the most secure method of processing.
Retail merchant accounts require that the card holder is present for at least 80 percent of credit card transactions. This is a great option for companies that do a small portion of their transactions remotely, via phone or mail order, since card information can be manually entered for up to 19.9 percent of card payments.
Accept Orders by Phone or Mail Order
If your business does a significant amount of business via phone or mail, a particular type of payment processing offered by a mail order telephone order, or MOTO, account could be an extremely effective option for you. With this type of merchant account, business owners or employees must enter credit card information manually either by phone or via the web to complete transactions.
The drawbacks involved with MOTO processing, however, can cost time and money. MOTO accounts are charged the highest percentage rates by most providersabout 3 percent or more of each paymentbecause of the potential of human error or intentional fraud by buyers. These types of transactions provide account providers with the least amount of information about card holders of all available categories for payment, thus increasing the likelihood of mistakes or misrepresentation.
Processing Mobile Payments
One of the newest types of credit card payment offered by merchant account is mobile processing. This practical method lets you accept secure credit card payments anywhere you receive cell phone service. These transactions are transmitted to the account provider either through a wireless swipe terminal or with the touch pad of any cell phone.
This is a fantastic option for any business that requires frequent travel or on site work, such as plumbers, exterminators or contractors. It also provides a very professional and convenient touch for businesses offering goods or services for sale at expos or other remote events. Imagine being able to ring up lines of customers at special events away from your storefront!
Bringing Your Business to the Web
One of the most effective ways merchant accounts can help any business expand its customer base is by offering payment via the internet. A well designed and maintained website can increase your business' exposure more effectively than almost any other means. Whether you offer products or services, doing business on the web will usher your company into the 21st century and make it easier for consumers to take advantage of what you've got to offer.
Internet merchant accounts are designed specifically to help businesses make the most of their presence on the internet by allowing you to accept credit cards instantly 24 hours a day. Most merchant accounts let shoppers add items to a virtual shopping cart and direct them instantly to a third party run virtual payment terminal when they're finished shopping. Internet merchant accounts are considered to be among the most secure types of credit card payments and rates are only slightly higher than retail merchant account prices.
In today's fast paced, instant gratification-based world, the ability to process credit cards is virtually essential to operating a successful and sustainable business. Be sure that you understand both the benefits and pitfalls of merchant accounts as well as the many options available to businesses before you sign any contracts. With a bit of earnest research, you'll be able to offer the convenience of merchant accounts to all of your customers in no time at all.