If you want to process credit card transactions or purchases through your POS system, you need a merchant account. One of the biggest advantages of using merchant account services is that the risk taken when processing payments passes from you to your merchant account provider. You just pay a fee to move some of the stress onto someone else’s shoulders.
Look at it this way; with every payment you make, there is a risk that your customer will never actually pay. They might not pay their credit card bills that month, or they might debit their account, which means your payment would bounce. If you don’t have a merchant account, you will never be able to see the funds, even if you have already delivered the requested product or service. At the very least, you may find yourself waiting indefinitely for a payment that you have processed with your card reader or payment service.
There are various benefits of high risk merchant processor. Merchant accounts give you the funds you need directly from the transactions processed. This means that it is the merchant service provider who has to deal with the headaches if something goes wrong. You don’t even have to worry about waiting for your income to appear.
To improve your payment processing solution, merchant accounts allow you to quickly generate revenue for your store. However, the benefits of merchant accounts come at a price. Account providers will need to fortify themselves against the risk they take on your behalf. This means that you pay additional fees to access your service.
Merchant Account Fees
Merchant accounts have some fees to consider. The amount you pay for things like setup and transaction fees will depend on the account providers you work with. Here we will explain some of the basic expenses to you, so that you know what to expect when setting your budget.
Merchant account companies often charge small business owners an upfront fee to prepare everything for them. Unfortunately, most suppliers will only provide prices based on quotes here. This means that you may need to request a quote before you have an idea of what you are going to pay.
Your installation fees will depend on things like the type of professional bank account you have, whether you’re using POS equipment, and more. Some suppliers also base installation fees on things like monthly or annual sales volume.
In addition to installation fees, some companies will charge you an ongoing fee for merchant services. This is usually the case if you access a range of tools with your merchant services, such as reports. Typically, maintenance fees are a fixed cost that comes up once a month. They are separate from your transaction fees.
Transaction fees are probably among the most important additional costs that you will have to take into account when setting up your merchant account. The transaction fees you have to pay depend on factors such as the type of business you operate and the card and payment processors you use. Remember that all the entities that make your card payments possible, from card processors to card networks and card issuers, want their own discount for the transactions they support. Here are the most common ways to manage transaction costs:
How To Get A Merchant Account
The most important thing to remember is that if you want to access the right payment solution without spending a fortune, you need to do your research. Find out about the merchant service provider you plan to use. Each company offers different features, price lists and processing fees. You might even find that switching to the right provider means you can eliminate unwanted monthly fees or get funds from your debit card transactions faster.
As you would expect, just as there are many large merchant account service providers, there are also terrible choices. Some suppliers may ask you to wait several working days before a transaction is carried out. Other companies will give you the speed you want, but the price will be too high for your budget. You should also look for things like automatic renewal clauses and cancellation fees. Early termination fees can often range from $ 300 to $ 600. This means that if you want to switch to another merchant solution with better customer support, you will have to pay a small fortune first.
Some suppliers have even hit their customers with something called liquidated damages. This means that you get a penalty based on the processing fees that would have been incurred for the rest of your contract. The good news is that the industry is gradually improving when it comes to protecting businesses from unnecessary costs. There are leading providers on the market who will forgo the ETF for small e-commerce businesses. If you are particularly concerned about termination fees, you can even find companies that allow you to pay for your transactions on a monthly basis instead.