Having a merchant account has become the new norm for most businesses trying to adapt and remain relevant in todays’ economy, but not everybody actually understands what having such an account actually means. Just like not everybody understands how an American Express merchant is any different from any other. But if you take your time and do some proper research, you’ll find that the answers aren’t that hard to find after all.
Understanding what A Merchant Account is?
In the world of sales, the biggest thing that attracts customers is options. It may sound strange to some but customers will always go to where they have the most options. And this includes payment options. Although not so long-ago cash was the preferred method of both customers and retailers of doing transactions, nowadays technology advances has opened up a whole new world of cashless payment options. And in order to keep up with the new times, and to ensure that the customers are happy, the merchant account was invented.
A merchant account is like a bank account that allows the merchant to receive payment from both credit and debit card. These were created when businesses, merchant banks and card processors decided that it is in their bets interest to offer this new service to their customers. But unlike a regular bank account, a merchant account does not transfer money instantaneously from the customers’ account to that of the merchant. Money transfers are done between the merchant account and the regular bank account on a daily or a weekly basis, depending on the amount accumulated.
But although most businesses now operate this kind of account, especially the online ones, not everybody sees their utility. There are still some voices that say that processing credit card payments online is pretty risky and don’t want the hassle that comes with exposing their customers to such a risk. This is why, in recent years, numerous forms of protecting customer card information from cyber-attacks and data breaches have been created, making payments over the internet some of the safest in the world. Granted, there can be the occasional slip up, but the benefits of this kind of account outweigh the negative parts hands down.
Opening a Merchant Account
Although it might sound pretty simple in theory, opening this kind of account is nothing to sneeze at. Some traditional brick and mortar business owners might not see the usefulness in one of them, but most businesses hoping to maintain a virtual presence, and to expand it, are more than happy to open up such an account. First of all, it’s not about them, it’s about giving the customers’ more options and making them feel safe when they choose to pay online.
Although there are many financial institutions that offer this kind of services, you should know that there is a series of serious questions and rigorous background-checks before being able to call yourself an account holder. Some of the things they are interested in knowing before opening your account are:
• The type of business you have?
• Does it have a high risk of credit card fraud or returns?
• Do you have any prior experience in that particular business area?
• Any kind of business related history events such as bankruptcies?
• Have you had any other merchant accounts in the past?
• Credit history and records.
There are a few ways of fast-tracking the whole process. For instance, if you are a new account owner, with no prior business experience, you can expedite the process by using the same bank as you do for your personal bank account. But, even if you had any accounts prior to this one or bad credit history, that doesn’t mean the bank won’t give you an account now. It just might mean that you’ll have to pay higher fees for the moment, until they are convinced that you are not a high-risk asset to them.
Why Is an American Express Merchant Different from the Others?
The basic difference between an American Express merchant and any other out there is that American Express uses what they refer to as a closed loop network. That means that the merchant accounts are directly opened by American Express, without the need of involving another merchant bank, as is the case with Visa and MasterCard. Just as with its cards, which they issue directly to their clients without going through a bank, Amex tries to keep things as close as possible. Some might not understand this strategy but it is very simple.
Although Amex has higher fees than other card issuers, they eliminate potential data leaks and breaches by eliminating any third-party that might want to get involved. By doing this Amex can better control his clients and ensure a safe space for them to do business in. Although this takes some big investments in security and other safety measures, Amex clients are pleased with the idea that the entire process is streamlined without having to mingle with any other party.
Since the introduction of Amex OptiBlue more card processors started accepting American Express, but that doesn’t change the fact that an American Express merchant account is something lots of people want. This is because American Express has always been a staple of quality in the financial world and associating yourself, on any level, with them means you are also part of a great financial institution.
Getting an American Express merchant account isn’t too complicated at all. One has to simply go to their website and follow the instructions given.
1. You’ll start by submitting an application that you’ll have to fill out online.
2. Select the type of account you want according to the business you have.
3. You will then have to provide a series of information both personal and business related. After doing so, Amex will send you a personalized estimate.
4. After completing all these steps, you’ll just have to say if you agree with the estimate and then will receive further information.
