If you have a small business or even run a website on Ebay, then a merchant account may give you the ability to process credit cards and debit cards, which gives you the convenience of never having to turn away a paying customer because you can’t process their payment. There are many companies that offer merchant accounts for businesses. Below is some information on what it actually is and how you can sign up with a provider.
Why every small business needs a Merchant Account
A merchant account is essential for any company that needs to process credit or debit card payments. Not anyone can open a merchant account – only legitimate business organizations with suitable qualifications can open a merchant account. Because society is quickly moving to a cashless monetary system, you are leaving sales and income on the table if you don’t have the ability to process debit cards and credit cards for your small business – especially if you do business online!
Where to get a Merchant Account
Small business owners can get a merchant account from independent sales organizations (ISO), or member service providers (MSP), and merchant banks. Merchant banks are different than your standard investment bank because they make investments in small businesses with their own capital. ISO’s and MSP’s are licensed and accredited brokers of credit card services which maintain contracts with banks to process and handle credit card and debit card transactions. These independent companies provide various services to vendors including debit and credit card processing equipment, product sales & client service, settlement management, paper storage and other essential business services. North American Bancard for example, is a company that provides all these services.
Before selecting your merchant account provider you should confirm the independent sales organization’s credentials. A qualified ISO must be accredited and sponsored by a verified financial institution and all affiliations must be declares on all legal documents. One tip is to verify the ISO you choose is sponsored by an FDIC insured financial institution.
Businesses should also compare costs between the various merchant account providers before making their selection. But be sure to compare apples to apples and take equipment rental or purchase prices into consideration. For example some merchant account providers, such as North American Bancard, offer businesses free equipment, service and support, in addition to guaranteeing the lowest processing rates.
Processing Payments with a Merchant Account
The proliferation of online services and payment options has changed the merchant processing landscape in recent years, allowing merchants and businesses to accept credit and debit card payments online. Some merchant account providers offer online payment processing, but you find it better to go through a dedicated e-commerce site that specializes in these services.
Even with the increase in online shopping, the vast majority of payments are still accepted via a credit card terminal, similar to those you would see in a store like Wal-Mart, or your local grocery store. Credit card terminals permit clerks to slide the credit and debit cards through the terminal to read and process the transaction. Some of the more advanced credit card terminals can process gift cards, allow cashiers to manually enter credit card numbers or expiration dates, and even verify and process checks. The information is then securely transferred to the merchant bank or third party vendor via a secure phone or Internet connection.
In addition to processing credit and debit cards more quickly, credit card terminals offer less expensive rates for processing transactions and are safer for customers and businesses alike, because they reduce the need to keep credit card numbers on site and diminish the threat of credit card number theft and identity theft.
Who Needs a Merchant Account?
Almost any business could benefit from utilizing a merchant account. Whether your company is a fortune 500 company or a two person family based business, if you process credit cards or debit cards, or would benefits from accepting these forms of payments, then you can benefit from using a merchant account. Since many people no longer carry much cash, accepting credit and debit cards can be more convenient, safer, and quicker than having someone write a check, and it’s certainly better than missing out on a sale!