Merchant Account Fees – Are They Worth It?

Merchant account services are the services that allow you to accept credit cards as payments, both online and off, and help you handle the credit card transaction processing. Without merchant accounts, your customers would have to pay with cash or check- and believe it or not, most customers will spend more if they can swipe … Continue reading “Merchant Account Fees – Are They Worth It?”

Merchant account services are the services that allow you to accept credit cards as payments, both online and off, and help you handle the credit card transaction processing. Without merchant accounts, your customers would have to pay with cash or check- and believe it or not, most customers will spend more if they can swipe their card and worry about the bill later.

The Cost of Accepting Credit Cards

Merchant accounts can be costly. There are numerous providers of merchant accounts that are reputable and offer good value for their service- but there are even more providers of merchant accounts that charge excessive fees and have hidden expenses that you were not aware of when agreeing to use their service to accept credit cards online.

Fees range from per transaction fees (usually a percentage or a few cents on each card processed) to monthly or annual maintenance fees that can range from a few dollars to a few hundred dollars.

Online Businesses Need Merchant Accounts

Online merchant accounts are crucial to having a successful online business venture. Consider it from the eyes of a customer: if you were on a website, looking to buy a widget, would you want to take the time to mail a check or money order, or do you plan on making a purchase right then with your debit or credit card? Most people don’t want to take the time to write and mail a check or money order for an online purchase- not having the ability to accept credit or debit cards will severely hurt your business as an online merchant.

As the merchant, credit and debit cards make your life easier, as well. You get your money much faster than waiting for a customer to write and mail a check or money order; and you don’t have to wait for the payment to clear the bank before you can mail out their purchase. Credit card payments offer you payment within a day or two of the customer putting in the card details.

Deciding if a Merchant Account is Worth the Fees

So are the fees that are paid for merchant accounts worth the value the accounts provide your business? It all depends on the type of business you are operating and the volume of sales you process on a given month, as well as the merchant account provider you choose to go with. Merchant account providers are not a one-size-fits-all solution for every business, and you really need to do a little research before selecting a provider. Consider the per transaction fee, the application fee, monthly maintenance fee, set up fee, and any annual membership charges you must pay. Do you have to purchase or lease any special equipment? Is the software for processing online credit card payments included in the service, or is that an additional fee?

Once you have that information for a few different merchant account providers, you can determine what you believe your credit card sales will be each month. This may be difficult to do, but make your best estimate based on your current level of sales and the idea that people typically spend more with a credit card than they do with cash.

Determine what fees you’ll pay on your estimated amount of sales each month, and see if it makes sense to pay for a merchant account. As mentioned previously, if your plan is to operate an online business- you really need a way to accept credit card payments online in order to become successful.

Evolving With the Market – How Trends Impact Merchant Credit Card Processing

Technology and trends are forever changing, which means merchant accounts practices need to change too — if a merchant wants to remain competitive. There are key factors to monitor that can help merchant credit card processing businesses stay relevant and in the “green”.

Watching Trends Puts a Merchant Ahead

It’s very important to monitor specific markets and their spending trends, as they hold the key to where you can focus marketing efforts and outreach. Look at what is happening in the market, and update your business model to fit the need. For example, social services, health care and training specifically are large potential growth areas according to the U.S. Department of Labor’s 2008 – 2009 Occupational Handbook, which also indicates possible spending trends.

Then, evaluate sales, marketing administration, underwriting and information technology strategies and risk management to see if each of those areas are operating at an optimal level. Once clear on what changes need to be made, its a good time to evaluate how to switch things up to meet market needs. Be sure to also engage the sales staff to carry out new approaches successfully on sales calls.

Economic Indicators and Sales Focus

When the market predicts sluggish consumer activity, move to more recession resistant verticals such as health care, education and utilities. Focus on the positive, and ensure your sales staff is doing the same. Incorporate educational and incentive programs to keep up morale and energy, and make sure they are aware of the latest trends and products so they can adjust their sales approach accordingly.

Expand the View to Include New Options

There are lots of tools available, but some might be outside of a salesperson’s field of comfort. Expanding portfolio options is a good place to start (helping staff move outside of a selling comfort zone), as well as reviewing and integrating the latest technology options on the market as needed. Merchants need to be aware of the latest security updates for retail, internet and wireless credit card processing as well, which can help create a built-in upsell opportunity.

Benefit Your Business and Your Customers With Merchant Credit Card Processing

Everyone in business realizes that ‘time is money.’ That makes efficient money management crucial. Customers need quality products and good service. By providing the efficient payment option of credit cards, you benefit both your customers and your business. Satisfied customers and secure transactions are important, which is why smart business owners shop around for merchant credit card processing services that provide these benefits. With up-to-date technology and encryption security, processing credit cards is safe and convenient for everyone.

The Security Standards Council

The negatives of identity theft, online theft, and credit card fraud make secure financial transactions a necessity. The Security Standards Council provides a complete set of requirements that ensures merchant credit card processing continues as a safe and reliable payment method.

The Payment Card Industry Data Security Standards (PCI DSS) set the guidelines for security management, network architecture, software design, and policies and procedures that protect customer account information. The security points provided include requirements for building a secure network, protecting cardholder data, maintaining a vulnerability management system, implementing strong access control measures, monitoring and testing networks, sustaining an information security policy, and upholding a policy that addresses the security of this vital information. These efforts all work together to protect merchants and the financial information of customers.

Credit Cards Increase Sales

Customers appreciate a safe and convenient way to make payments for products and services. Credit cards offer secure payment transactions, simple-to-access transaction histories, and the facilitation of exchanges and returns. Credit card services include many forms. For example, pay at the pump gas station credit card management differs from a traditional retail merchant credit card account. Merchant credit card processing services offer advantages to any type of business, whether a small business account, merchant account, or ecommerce account.

A credit card service can provide merchants with a safe and efficient payment method designed to best suit their type of business. This not only offers a benefit to customers, but also streamlines the payment process for businesses. In addition to enhancing customer convenience, processing credit cards provides businesses with the ability to access online accounts and records, and manage their databases. These offerings allow merchants to assess their profitability and productivity in an instant.

Benefits for All

Offering the option of paying with credit cards will help you build your business as you also provide convenience and security in the process. It allows you to offer additional customer services like debit card and gift card transactions. With customized services that match your business, you will enjoy the benefits accepting credit cards can offer, including repeat customers and a simplified business process.