Online Merchant Accounts : Reviews and Expectations
The primary costs to a merchant of merchant accounts are discount rate and transactions fees. The merchant account provider has a lot of latitude in the pricing structure.
Three tier pricing of Online Merchant Accounts is one of the most common pricing schemes. Using 3 tiers pricing, the merchant account provider groups the transactions into 3 groups (tiers) and assigns a rate to each tier. The three tiers are qualified, mid-qualified and non-qualified rates.
A qualified rate is the lowest tier. It is what a merchant is charged when processing a consumer credit card in a way that has been defined as standard by the merchant account provider. The qualified rates is what is usually quoted by merchant account salespeople. A mid-qualified rate is what the merchant is charged if processing a transaction outside of standard parameters. A mid-qualified rate may apply to rewards or corporate cards, which can comprise up to 40% of the cards used for purchases. The Online Merchant Accounts, of course, has no control over what card a consumer uses.
In case you are thinking of setting your own website to sell goods or services online, probably you are even thinking of accepting credit cards on your website. Accepting credit cards is one of the best ways to attract the impulse buyers and international customers.
There are two ways by which you can accept credit cards on your site. They are: Using your own merchant account: To accept credit card payments on your website, you will first need a bank that will allow you to open a merchant account. Check with the local banks for more information on this.
Accepting credit card payments on your website accords your business with a certain amount of professionalism. And, as mentioned earlier, your transaction costs are usually much lower.
Online Merchant Accounts : Reviews and What to look for in a Merchant Account ?
Accepting Credit Cards
As a small business or a small-small business (under 10 employees) it is important that you consider accepting credit cards if you don't do so already. People expect to be able to pay with plastic. They can pay with credit cards at fast food restaurants, gas stations, coffee shops and more. It is just expected, fairly or not, that a business be able to accept credit cards.
The first thing you need to do is evaluate Merchant Acounts. You may naturally assume that it is just easier to use your bank to set up your account. Well, that is convenient, but is it really in your best interest.
Many small businesses fall into the trap of latching onto their first merchant account and staying with them because of the convenience. They do this to their detrement. Over the past few years rates have lowered, while these small companies, out of loyalty or convenience, have been stuck paying the same rate they had when they first started.
Online merchant accounts are another consideration. You will need virtual versions of the credit card processors described above:
- Secure Gateway: This translates the information entered onto your website into data that can be read by an electronic card processing system.
- Virtual Terminal: This eleminates the need for a physical point-of-sale card processing system.
- Online Shopping Cart
- Virtual check processor
- Wireless terminals
Go into acquiring a Merchant Account with your eyes open. It is a service that you will need if you plan on being competitive, so make sure you do it right.
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