As a small business owner, you may be looking for ways to accept credit card payments from your customers. If so, you'll need to find a merchant services provider that can help you set up a credit card processing account.
There are a few things to keep in mind when choosing a merchant services provider, such as the fees they charge, the types of credit cards they accept, and the level of customer service they offer. In this guide, we'll provide an overview of merchant services for small businesses, so you can make the best decision for your business.
What are Merchant Services?
Merchant services refer to the ability to accept credit card payments from customers. In order to do this, you'll need to set up a merchant account with a provider.
There are a few different types of merchant accounts, but the most common is a retail account. This type of account allows you to process credit card payments in person, such as at a brick-and-mortar store.
Another type of merchant account is an e-commerce account. This type of account allows you to process credit card payments online, such as on a website or through a mobile app.
What are the Benefits of Merchant Services?
There are a few key benefits that come with using merchant services, such as the ability to:
· Accept credit card payments: This is the most obvious benefit of merchant services. By accepting credit cards, you can make it easier for your customers to pay you. In turn, this can help you increase sales and grow your business.
· Get paid quickly: When you accept credit card payments, the funds are typically deposited into your account within a few days. This is much faster than other methods of payment, such as checks, which can take weeks to clear.
· Build customer loyalty: Offering credit card payments can help you build customer loyalty. This is because customers appreciate the convenience of being able to use their credit cards.
· Reduce fraud: When you use merchant services, you can reduce the risk of fraud. This is because you can use tools, such as AVS and CVV2 verification, to verify the identity of your customers.
What are the Costs of Merchant Services?
There are a few different costs associated with merchant services, such as:
· Transaction fees: Most merchant services providers charge a per-transaction fee. This fee is typically a percentage of the total sale, plus a flat fee. For example, a typical transaction fee might be 2.9% + $0.30.
· Monthly fees: Many merchant services providers also charge a monthly fee. This fee can vary depending on the provider, but it is usually around $10-30 per month.
· Equipment costs: If you need to purchase equipment, such as a credit card terminal, you will likely have to pay an upfront cost. However, many providers offer leasing options that can help reduce the upfront cost.
· Contract terms: Most merchant services providers require you to sign a contract. The length of the contract can vary, but it is typically one to three years.
· Termination fees: If you cancel your account before the end of your contract, you may have to pay a termination fee. This fee can vary depending on the provider, but it is usually around $200.
What Are the Different Types of Credit Cards?
There are a few different types of credit cards that you can accept, such as:
· Visa: Visa is one of the most popular credit cards, with over 60% of transactions being made with a Visa card.
· MasterCard: MasterCard is the second largest credit card, with around 30% of transactions being made with a MasterCard.
· Discover: Discover is the third largest credit card, with around 5% of transactions being made with a Discover card.
· American Express: American Express is the fourth largest credit card, with around 3% of transactions being made with an American Express card.
What are the Different Types of Merchant Accounts?
There are a few different types of merchant accounts, but the most common are:
· Retail account: A retail account is the most common type of merchant account. This type of account allows you to process credit card payments in person, such as at a brick-and-mortar store.
· E-commerce account: An e-commerce account allows you to process credit card payments online, such as on a website or through a mobile app.
· MOTO account: A MOTO (Mail Order/Telephone Order) account allows you to process credit card payments over the phone or by mail.
· High-risk account: A high-risk account is for businesses that are considered to be a higher risk for fraud or chargebacks.
How Do I Choose a Merchant Account Provider?
There are a few things that you should consider when choosing a merchant account provider, such as:
· Pricing: Make sure to compare the pricing of different providers to see which one offers the best rates.
· Fees: Make sure to compare the fees of different providers to see which one has the lowest fees.
· Contract terms: Make sure to compare the contract terms of different providers to see which one has the most favorable terms.
· Customer service: Make sure to read online reviews of different providers to see which one has the best customer service.
· Reputation: Make sure to research the reputation of different providers to see which one is the most reputable.
How Do I Apply for a Merchant Account?
Applying for a merchant account is typically a simple and straightforward process. Most providers will have an online application that you can fill out. Once you have submitted your application, the provider will review it and make a decision. If you are approved, the provider will send you an agreement that you will need to sign and return. Once the agreement is signed, the provider will set up your account and provide you with the necessary equipment.
