When you set up a business today, you must have the ability to accept debit and credit cards as a form of payment. Now that the traditional days of cash and carry are almost extinct, this leaves new business owners in need of a merchant account provider. These account providers will set up a special account that allows your online or retail business to accept debit or credit cards as a form of payment.
When researching merchant accounts as a Canadian entrepreneur you will find that most online information is aimed at American businesses. Although this information can be helpful and can act as an informative guideline, it is not typically accurate for Canadian companies.
In Canada there are several types of merchant account. One of these accounts will allow direct payment from personal bank accounts, as well as Visa, MasterCard and American Express to your merchant account. Previous studies have indicated that one third of Canadians make their merchant payments using this system. This ranks Canada second in the world for debit card use. Other studies have shown that consumers who pay with American Express tend to spend more money. It is for reasons such as these that choosing the right merchant account provider can be an important element for the success of your business.
Canadian businesses have two merchant account categories to choose from; financial institutions also referred to as banks, and private label companies, known as independent sales organizations (ISOs).
Both types of card processors offer similar buy rates. The buy rates from MasterCard and Visa are referred to as ‘interchange’. These companies make a profit by charging merchants more than their buy rates. These are known as merchant ‘discount rates’.
An Internet business will certainly need international sales for consumers around the globe to shop online. The interchange for this type of payment processing is something you will need to look at when choosing a merchant account provider. It is standard practice for credit card processors to increase their interchange rates when providing the processing services internationally.
Each company will often specialize in a type of merchant account. For example, there are some who provide virtual merchant accounts while others provide retail merchant accounts, motto or mail order merchant accounts, as well as Internet, high risk and wireless merchant accounts. Again, chose the right account depending on your requirements.
If your business is already well established but you have not yet implemented the online payment system, there are many reasons to do so. For example, it will increase your customer base. And with the majority of products and services now available online, your customers will expect your business to supply a payment option online. If you cannot provide this service, you may lose out on potential sales.
If you live in a smaller community and feel obligated to accept personal checks you can simply add a check scanner to your credit card processor. This means that you will be fully equipped to accept cash, checks and credit cards as forms of payment, allowing your business to accommodate everyone.