If you operate a small business, there is a good chance you do not have an elaborate retail set up, but it could still be useful for you to have a merchant account.
Small business merchant accounts work just like mobile accounts. They typically use a portable machine or even a smartphone as a means of processing credit card and debit card payments. Creating more options for client payments has to be good for business.
Paying with Plastic
According to statistics from the American Banking Association, Americans are becoming fonder of their plastic, with fewer preferring to make cash or check transactions.
Not having a credit card processing facility can be expensive due to lost business:
1. Having the means to take credit and debit card payments means you can cut down on accepting checks and extending credit.
2. Invoicing is reduced, as the ability to collect upon delivery means less need for 30-day, 60-day or 90-day terms.
3. Small business merchant accounts can open doors at trade shows and conferences where you want to sell goods and/or services. The wireless credit card processor not only provides immediate confirmation of sale, it costs less than having to call in the credit card number.
Small business merchant options offer terms very similar to regular accounts; providing quick and reliable service at reasonable costs based upon monthly transaction volume.
Applying for an Account
If you have good credit, applying for a merchant account is straightforward. Risks will be accessed and terms will be provided based upon the results. If your business is new, you can expect to be offered less-favorable terms than if your business is established. Once you have proven yourself, terms can be adjusted once the contract period ends.
Approval can take anywhere from seven days to four weeks, although there are some providers who can offer approval as quickly as 48 hours. But again, much depends upon your personal circumstances. Circumstances that affect the terms and conditions offered include:
1. How payments are taken. Online transactions are considered higher risk than face-to-face transactions due to the anonymity factor of online activities.
2. The average amount of turnover. Higher levels of turnover will be held at a higher risk.
3. Time to completion. A transaction lasts from the moment payment is made until the service or product is delivered. The longer the delay between one and the other the higher the risk factor.
4. Type of business. Certain industries are considered of higher risk than others.
Rates and Fees
You will need to review offered rates and transaction procedures before signing the contract. Generally, the provider will charge a set-up fee and monthly and/or annual fee.
Each credit card transaction made will incur a cost that is typically a percentage of the transaction amount. Monies will be transferred as quickly as next day or may be deferred for as long as 30 days, depending upon your particular terms and conditions.