According to "Jumping Through the Merchant Account Hoops" by Hera Communications, the average credit card transaction is $40, compared to just $9 for cash sales. So, by not accepting credit cards you put yourself at a huge business disadvantage compared to your competition.
It may also surprise you to learn that credit card transactions can cost your business less in transaction charges. A case study by Coopers & Lybrand found that it costs, on average, 2.7% to process a credit card transaction as compared to 4.8% for cash and 4.0% for checks. The reason for this perhaps surprising statistic is that cash and cheques require more handling by financial institution staff whereas credit cards tend to be processed electronically for the most part these days.
To offer a credit card payment facility to your customers you need to set up a merchant account. Typically you will also need to have equipment installed to accept the payments. If you wish to accept credit cards Online you will also need to sign up with a payment gateway such as CyberCash or VirtualNet to allow for instant authorizations over the Internet.
The provider of your business bank account should be your first port of call for a merchant account, but if you're looking to provide an online credit card payment service to your customers, it's important that you make sure that any merchant account provider can demonstrate a track record with accepting online payments.
Applying for and being accepted for a merchant account can take anything from a couple of days to a couple of weeks or more. Your chances of being approved relate directly to your already-existing business track record. That's why your own business bank is a good first option, because they know you and your business better than anyone else.
How much can you expect to pay? The cost of a merchant account can vary enormously mainly based on the perceived risk associated with the business applying for the facility and the area of business they are involved in. Typically you can expect start up costs to be in the $190 - $300 range with processing fees on individual transactions from around 2% variable depending on sales volume. The more business you're going to be putting through your merchant account, the more you'll be in a position to negotiate with your merchant account provider.
Merchant Account On Line
A Fast Merchant Account is waiting to usher your business into the technology age! All you need to do is choose a lender that will work with your company and then enjoy the benefits of a fast merchant account. Here are some of the ways in which your company can advance with the help of a merchant services account:
1. A Fast Merchant Account will link you to a stable lender with the authority to help your company get set up to accept credit card payments. You will enjoy the prestige and security of working with a top-notch banker or a dependable financial institution that can provide the know-how and a safety net for your credit processing transactions. Take time to find one with a solid financial reputation that offers equitable terms at affordable rates. Enjoying the reputation of providing credit card processing options will secure your position in the local business community.
2. A Fast Merchant Account could bring in more customers. Many consumers dislike the hassles of paying by cash. Some don't like to carry along a checkbook when they go shopping. When they visit your Website or shop and learn that you do not accept credit cards, you may have lost your chance forever to court their favor and curry their patronage. But offering credit card processing can move the checkout line quickly along and help paying customers avoid problems associated with cash-only transactions. Post a sign on your Website or at your door to let shoppers know that credit will be accepted.
3. A Fast Merchant Account may prompt your clients to shop often and spend more. Some studies suggest that customers who pay with credit cards buy more than those who pay with cash. While you don't want to encourage reckless spending in your customers, you want to provide them with the freedom to choose the most convenient payment method rather than restricting the way they can do business with your company. They may get in the habit of shopping with your enterprise, and they could even bring along family members and friends. Many company owners who open merchant accounts claim that their client bases grow along with their profits.
4. A Fast Merchant Account might increase your sales volume and profit margin. When customers feel comfortable in shopping at a company where they can use credit payments, they may be inclined to buy more and to return often. They could let others know as well, and before you know it, your client base could double. But if you continue doing business the old fashioned way, you may never see these benefits materialize. Before you know it, your local and international competitors will be doing business light years ahead of you if you do not open a merchant account and provide credit processing options like credit card swiping and Website credit payments to your clientele.
Find out what merchant services can do to prepare your business to negotiate e-commerce in the 21st century. It can all begin with a Fast Merchant Account!
Both Manishh Kumarr & Shane Penrod are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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