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If you're a small business or just starting out, you may not feel ready
for a merchant account. Obtaining a merchant account is not usually
considered difficult, however, for a newly established business it isn't
always feasible to run out and a merchant account immediately.
Starting
a business is often costly and risky to begin with- you do not need to
go out and spend money on optional features (like a merchant account)
until you know whether or not your business is going to succeed, and
whether or not you'll have the need to accept credit cards from
customers.
Did you know there are other options and alternative methods for
allowing your customers to pay you with credit cards? Companies called
"third party credit card processors" do not require their customers to
create merchant accounts, and yet they can be used to allow small or new
businesses the ability to accept credit card payments from customers.
Why Worry about Accepting Credit Cards at All?
It's important that you are able to accept credit card payments from
customers, however, even if you aren't feeling up to getting a
traditional merchant account right now. |
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It's been proven that businesses
that except credit cards experience higher sales than those that do not
accept credit cards. In fact, some companies have reported an increase
of 50 to 400% in sales once they began accepting credit cards as a
payment method. It also helps to establish a professional image- and for
some potential consumers, it generates a feeling of trust. ("If the
business is established enough to accept credit cards, they're a quality
business that I should shop with"!)
Home based businesses and online businesses can take advantage of a
third party credit card processor instead of going directly with a
merchant account if they wanted to. It allows a business to determine
how many customers will make purchases with credit cards, as well as
determine if more or higher sales come as a result of accepting credit
cards as payments.
A third party credit card processor offers real-time processing online,
online virtual terminals for entering manual transactions, no maximum
limits for processing amounts in most cases, and the ability to set up
recurring billing.
One of the advantages of using a third party credit card processor over
establishing a merchant account is that instead of paying a transaction
fee or a monthly fee, you pay a percentage of the sales (from 2% to
15%), and only when you actually make sales. Some merchant account
providers require that you pay a monthly fee- even if you aren't making
any credit card sales. By starting out with a third party credit card
processor, you can judge how many customers might use the option to pay
with credit cards before you go through the process of applying for a
merchant account and getting everything set up.
How do third party payment processors work?
Once you have an account with a third party payment processor, you'll
create links to your products that allow customers to order and pay with
credit. The links send the customer to the third-party processing
company's server, and they handle the orders for you. Payments are
processed by the company, and the sales are credited to your own
business- less the third party processor's commission. You receive your
money from the third party processing company at established payment
intervals. Typically, money owed to you from the third party credit card
processing company is deposited automatically into a checking or savings
account that you have set up for your business and linked to your
account with the third party processor. Debbie Dragon |
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