Ecommerce Merchant Services: What Are Your Options

If you have a business that operates online, either fully or partially, you’ve probably realized by now the need for accepting credit cards as a method of payment. More than 90 percent of all sales made on the Internet are made using a credit card, so if you aren’t accepting them by now, you’re missing out on substantial profits. In fact, even if your business only operates partially online, if you aren’t accepting credit cards, your days as an online business could be limited.

Many ecommerce merchants mistakenly believe that accepting credit cards is an expensive proposition only affordable by the “big boys.” In fact, the process is pretty simple and the fees have been drastically reduced from what they once were, which means even very small businesses of modest means can easily find a solution that fits within their budget.

To begin accepting credit cards you need to open a merchant account. Account providers are everywhere, and a search on the Internet yields millions of results. The difficulty is not in locating a provider, but in determining which one is right for your business.

The first consideration when choosing an account provider, or in choosing any service provider for that matter, is to select one with a solid track record of providing good, reliable customer service and technical support. The merchant account is the interface between your business and the credit card companies, so you want to be sure all of your transactions are processed smoothly and without interruption. You also want to make sure your questions and concerns are addressed quickly.

Luckily, there are dozens of online forums where business owners just like you are discussing their current and past merchant account providers. Visiting those forums is a great way to become familiar with the different service providers, and to review which providers are most highly regarded and which ones to stay away from.

If you’re considering a provider that isn’t mentioned on the forums, it doesn’t mean you have to eliminate them from your list of possibilities. You can do your own due diligence and check with the Better Business Bureau to make sure there are no complaints against them, and then carefully review their contract, paying special attention to the fine print. While it’s true that not turning up any complaints is a good thing, not turning up any comments can mean the company is new and doesn’t yet have a proven track record. Then you have to decide if it’s worth the risk of signing up with an unproven company or if you’d rather look for a more established account provider.

Another factor when looking for an ecommerce merchant account provider is the list of fees and costs associated with the account you’re considering. Online businesses are generally considered riskier than retail establishments. Why? Because in a retail business, the cardholder is right there in front of you, making the purchases; therefore, the risk of fraud is much lower. In an online environment – and this also applies to telephone sales and, to a lesser extent, to mail order businesses – the cardholder remains anonymous, so the chances of fraud are much higher. As a result, the fees associated with ecommerce accounts (and telephone and mail order accounts) are usually higher than they are for retail accounts.

Some of the fees you can expect to pay include the initial one-time application and setup fees – although these are often waived by providers – and recurring fees that are based on the individual transaction. These fees are usually referred to as discount fees (or discount rates) or transaction fees. The transaction fee remains the same regardless of the size of the transaction, and is usually somewhere between 20 cents and 30 cents. The discount rate varies by the type of account you have, usually falling somewhere in the 2 percent to 4 percent range, with online businesses having higher fees than retail businesses.

You also want to make sure your merchant account provider is able to accept sales from international buyers, especially if you intend to do business on the worldwide web, where customers can be located anywhere in the world. Some merchant account providers only accept payments form the U.S. and Canada, while others accept payments from anywhere in the world, but charge a fee for it. Another advantage of accepting credit cards for international orders is that you don’t have to worry about currency conversions – they’re done automatically.

You’ll also have a choice of whether to use a gateway provider for completely automated processing of credit cards and real-time, “instantaneous” transactions, or a “virtual terminal,” which allows you to accept credit cards online but requires you to manually enter the information later on.

With so many merchants already accepting cards, it’s likely your competitors have already begun allowing credit card transactions, and you could be playing catch-up. Take the time NOW to learn about your ecommerce merchant account options and begin growing your business and reaping a greater share of the rewards.

Karen Zabel is a freelance writer who writes about Merchant Credit Card Processing Services.

Article Source: http://www.marketingarticlelibrary.com

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated