03 July 2009

Advice from Experts in Selecting a Merchant Account Service

Experts' advise three things to do when selecting a good merchant account service namely: determine your needs, assess your business and evaluate hardware and software requirement.

Merchant account service facilitates payment for goods through credit/debit cards and other forms of card payments. It is imperative to fully maximize the use of a service provider by choosing according to the following guidelines:

Determine your needs

There are few things to consider before choosing a merchant service provider namely the bulk of orders, the processing time and the method of payment processing. The two methods of payment processing are the following:

Batch payment processing

This is also called the manual processing, which receives low volume orders either telephone or online forms. In order to process, the company has to be contacted for verification purposes or a terminal device can be used to swipe the card. The advantages of batch payment are; lesser costs and higher protection against fraud while its disadvantage is the time consumed when manually processing orders.

Real-time payment processing

The advantage of this payment processing is the credit card is automatically processed upon submission of the customer's order. The processing time is fast; although, it is more expensive than the manual payment processing.

Assess your business

For products and services sold at a higher volume, choose a provider with a lower transaction fee to have higher revenues. It is also wise to determine if the bank requires a minimum number of transactions per month. If so, you will still need to pay a monthly fee even if there is no business transaction that has transpired. Sometimes, you will need to pay an additional payment if you can't meet the minimum transaction requirement.

Evaluate hardware and software requirement

Hardware and software requirement depends on the payment processing method. If manual method is used therefore, you need hardware to manually process the order. For software requirements; it is advantageous if the merchant account provider offers integrated services to meet the specific needs of each client.

If you want to tap the services of a merchant account provider, assess the provider further by asking follow-up questions that would answer the basic things one need to know about a good account provider. Here are some of the basic yet, vital questions:

What information does the provider will ask from me?

* Credit history
* Business, product and service types
* Average volume sales
* Refund policies
* Processing method

What fees do you charge for your services?

The rates vary according to your type of business and the merchant account provider. Here are some of the fees that apply:

* Discount rate
* Equipment and installation
* Transaction fee
* Monthly fee
* Reserve and charge back fee

Do you offer integrated services?

Choose a provider that offers an integrated service like order system, payment system, and payment gateway to have a smooth transaction flow. However, the major disadvantage of an integrated service is the high cost per transaction since they have to mark-up in order to profit.

Do you have a minimum number of transactions per month?

The client is obliged to pay a certain fee even in the absence of a transaction due to the previously agreed minimum monthly transaction.

What security features do you have?

A good merchant provider should have a software that would encrypt confidential information like credit card details to reduce risk of fraud.

Not all merchant service providers are equally capable of offering integrated services and packages. Hundreds of account providers are available online; however, one should do intensive research to learn more about their services. The type of business offered is one determining factor for provider's rates and fees.

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