What you need to know about getting an online merchant account
Despite its many advantages, many people are still nervous about anything to do with the internet. Merchant accounts have a long and respectable history dating back to their establishment nearly fifty years ago, but online merchant accounts suffer from the same stigmas as anything else internet-based. Even retail business owners but especially internet business owners are doing their investments a disservice by not getting an online merchant account. These services are not a gimmick; they are the future of business.
Getting a merchant account is not nearly as difficult as it used to be. While initially online businesses were categorized as high risk across the board, many merchant account opportunities are available now. In fact, online merchant account providers have been sprouting up by the dozens in an effort to meet the huge demands of the quickly expanding internet-based business market. What this means is that, not only are the services available, but their providers are quite literally competing to give them to you.
Service providers are so eager for your business that you should not even have to pay an application fee. So many quality companies offer a free application process that spending your precious capital on a company that does not would be an outright waste. While you will still have to complete an application, the usual merchant account applications are simple and short and should require no great amount of preparation or research. You will be expected to provide personal information including your legal name and address and at least two forms of contact. You will also need your business name, ownership type, and web address. Some larger and more established providers may go as far as asking for your average monthly cash flow, projected credit card volume, social security number, bank account information, and tax ID. While some people are hesitant to release this information, it is standard to virtually all merchant account applications, and is far less than banks require to open a internet merchant account.
A provider that truly wants your business will be happy to provide you with any reasonable requests for information. Ask for references, business affiliations, and price lists. Because of the high level of competition in their industry, fees should be relatively standard. Any company that is charging atypically high rates is a red flag. Furthermore, any company that does not fully disclose their charges, rates, and fees is better avoided. Discount rates and transaction fees are actually deducted by the issuing banks, so these rates are unavoidable and should vary little. Statement fees and monthly access fees are also fairly standard but shouldn’t be more than $5-10 or $15-25 respectively. Some companies will waive set up fees to try to entice you. Be sure that they are not making up for this with large mark ups on the other rates and fees.
While it is tempting to choose the company with the lowest set up charges, it is important to note that you might be getting what you pay for.
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