Find out What Your Small Business Can Gain from Opening a Merchant Account
Whether your small business is a time honored mainstay or just
getting its feet on the ground, chances are you’ve heard of the benefits
of opening a merchant account. Merchant accounts offer the convenience
of processing credit and debit cards for payments—a service which is
often taken for granted in today’s fast paced marketplace.
accounts are excellent options for most any type of business, from
service providers like plumbers and exterminators to restaurants and
cafes to grocery stores and boutiques. Providing a fast, simple and
secure way of paying without cash makes it easier for your customers to
enjoy your goods and services and will lead to an ever expanding base of
Before you jump into the sea of credit card
processing, however, it’s a good idea to get your business’s feet wet
with the basics of how merchant accounts work. Take a few moments to get
the lowdown on merchant accounts now with this quick overview.
Merchant Account Providers
merchant accounts can only be legally offered by specialized merchant
banks, many companies, called independent sales organizations, or ISO’s,
provide a range of helpful services and act as a third party between
businesses and banks.
ISO’s can vary greatly when it comes to
services offered, contract terms and fees. It makes sense to conduct a
thorough and patient search before you decide upon the ISO that’s right
for your business. Any company offering merchant services should be able
to promptly provide proof of sponsorship by an FDIC-insured banking
Basic Types of Merchants Accounts
years, the two types of merchant accounts available to businesses were
only retail and mail order-telephone order, or MOTO, accounts. With the
advent and prevalence of the Internet and its many subsequent web-based
businesses, Internet accounts have joined them. The main mode of
business you offer will determine which type of merchant account is best
* Retail Merchant Accounts – Retail merchant accounts
are the best option for businesses who offer a physical storefront or
point of purchase. They are considered the most secure type of
transaction since at least 80% of all card processing must be done
instantly with the card holder present. These accounts offer the least
expensive rates per transaction but require the purchase or leasing of a
credit card processing terminal from your account provider.
Accounts – The main advantage MOTO merchant accounts offer is the
ability to process credit cards on a deferred basis. Businesses are
supplied card information by customers and later provide this
information to account providers via the Internet or telephone. This is
considered a higher risk process than other types and also comes with
the highest transaction fees.
* Internet Accounts – Internet
merchant accounts are rapidly becoming some of the most popular as they
accommodate the rising number of businesses who conduct payment
processing on the web. This service can use a custom designed payment
portal or, more often, take advantage of third party payment gateways to
let customers shop at their leisure, adding items to a virtual shopping
cart and pay securely by entering card and billing information when
Merchant accounts and the
ISO’s who provide them continue to offer an expanding array of services
to suit the needs of small businesses.
* ATM and e-check
processing – For businesses that do a lot of business via the web, it
can be helpful to offer the convenience of payment by ATM card or
e-check. While ATM cards can be processed the same way as a credit card,
e-checks let merchants withdraw payments from a customer’s bank account
using their routing and account numbers. E-checks can be printed
physically with the help of specialized software or can be verified and
processed using a third party service provider.
* Escrow services –
Escrow services can be especially helpful to certain types of businesses
that deal with major transactions such as real estate or those who need
a third party liaison, such as auction houses. ISO’s who provide escrow
services can hold deposits for large purchases or help ensure customer
satisfaction by withholding payments until the good or service has been
rendered to their specifications.
* Mobile credit processing – For
businesses who often offer their services or goods while on the road,
many ISO’s offer the ability to process payments remotely. This can be
accomplished with the help of a specialized mobile processing terminal
or a regular cell phone and works anywhere cell service is available.
an extra dose a convenience to your customers’ lives with a merchant
account today. Their many benefits provide a secure and simple way to
process payments and are sure to keep your growing pool of patrons
coming back again and again.