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5 Questions about merchant accounts

It is critical for a new business to be able to accept credit cards in today’s world. While a handful of businesses might be able to scratch out a profit by operating only on cash and checks, any business that needs to take online orders or make large transactions needs to be set up to take their customer credit cards. In order to do this, a business first has to set up a merchant account.

Merchant accounts allow a business to have someone else process their credit card transactions. These services collect and forward credit card information to various banks, then transmit the payment to the business’ bank account. There are hundreds of merchant account services available today, and choosing which one is right for your business can be challenging. Before choosing, ask a merchant account service these five questions.

  1. What fees do you charge for in-store credit card processing? This is one of the most obvious questions to ask, yet it is surprising how many businesses sign up for a merchant account without carefully reviewing the fees. Some service providers will charge a flat monthly fee regardless of how many transactions are processed, while others charge a percentage of the total amount of the transaction. Some charge both. Think about the number of transactions your business processes every month before agreeing to one of these payment plans.

  1. What fees do you charge for mobile and online credit card processing? Mobile and online payment processing is fairly new, causing some merchant account providers to charge more for this service. Some tack on a fee to any transaction that does not occur from the “home” location. Other merchant account providers charge the same rate no matter where the sale took place or the credit card was swiped. Consider how and where most of your business’ transactions take place before deciding on a merchant account provider.

  1. How quickly will money be deposited into my account? Many years ago, it was common for credit card companies to wait several weeks before mailing a check to a store or business reimbursing them for their credit card charges. Today, most places take care of everything electronically. Nonetheless, some service providers claim they can deposit funds into your bank account within minutes, while others claim it can take up to twenty-four hours. If you run a lot of transactions and you need money from them to cover immediate expenses, you might want to look for a service with immediate deposit.

  2. How are customer disputes settled? Every business owner knows that no matter how things are run, a customer might have a billing dispute. Some merchant service providers have a policy to immediate refund the customer’s money, then settle the problem. Others will place the customer money in escrow while the issue is being resolved. Think carefully about how you want your merchant service provider to handle these disputes, then find a provider whose policy matches yours.

  3. How satisfied are your current clients? With so many providers to choose from, it can be difficult to pick the right one. Make sure you ask for references or read review websites to learn about which companies are thought of well by their clients and which ones are trouble.

Choosing a merchant account service provider can be tricky, but making the right decision can save you and your company thousands of dollars a year. Be sure to read as much as you can before making this decision.

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