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Online businesses make use of the payment gateway systems in order to implement the shopping cart function on their website, so that they can accept both debit and credit cards from customers. There are a lot of advantages for the merchant with such an account, but you need to be careful when choosing your provider and when setting up the different functions with your account.

Possible drawbacks an online business might encounter with the setup of a merchant account

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One of the most often met disadvantage, merchants agree to it as well, is when there business is being categorized as a high risk business. What does this mean? Simply, that their business sells products and/ or services that are high risk. For instance, if you sell tourism packages online, this is quite a shaky field, as people tend to ask for refunds or chargeback due to the fact that hey want to cancel their trip for one reason or another. This means, that for such a chargeback you as a merchant are going to be penalized (and the costs incurred by high risk merchant accounts are quite expensive).

Or, if you sell high blood pressure regulating medication containing natural extracts (not scientifically approved medication, but what we call OTC – over the counter drugs), you will be again categorized in the high risk business category. Therefore, one of the major drawbacks might be the costs incurred with chargebacks and refund requests.

Then, if you are a fresh business starting just now on the online market, you may not qualify for a merchant account right away. It is just like when you are trying to get a loan without a credit history (quite impossible!). Therefore, as a first step you will need to partner with an Independent Sales Organization (called ISO), who will act as an intermediary between you, your customers and the bank, thus facilitating the sales process. However, nothing is for free in this life, so they most often operate on a commission basis. Until your business starts rolling, and you can make proof of a positive sales history, you need to stick with the ISO as an intermediary.

Advantages outweigh by far the disadvantages

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• A few years back you as a merchant had to apply for a different merchant account if you accepted VISA credit cards, and a different one for MasterCard. Now, these merchant accounts usually facilitate transactions from all major credit card brands. No separate fees and charges, just one single type of fee regardless of the type of the card
• Merchant accounts open the window on the world for your business. Just imagine what it means to your business if you would accept international customers. Higher traffic to your presentation webpage, means a greater number of potential customers for you => unprecedented profits.
• Merchant accounts offer a simplified overall transactions process for the merchant. He will receive very detailed statements, so that he can keep track of his business transactions very efficiently
• They can save both precious time and money.

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VISA, MasterCard and Discovery credit cards are circulating the online market like foreign troops invading a country. If you run an online business, and you are selling products or certain services, you must enter the trend and accept credit card payments. People find it so much easier if they can get their hands on a favorite pair of boots on the instant, by using their credit card, and receiving the order the next day. The electronic payment system is:

• A trustworthy system both for you as a merchant and for the client
• An easy process
• A system that will bring you significantly higher profits, through impulse shopping. People come to your site to buy only a specific item, but then they will also notice that discounted digital camera you are offering. If the card has enough funds, they are going to buy it.

What you will need before you can implement the process

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• A Business checking account
• A Business license (issued by your government office)

You should carefully research the market and see which the best offers for business checking accounts are. These types of accounts are specifically tailored to meet your merchant needs. At BOA for example, you will find more types of such accounts available, you just need to choose what suits your needs best:

• Basic account – total security protection, bill pay options, mobile banking and other customizable offers
• Business plus (Advantage) – you can add between 1 and 3 additional checking/saving accounts, so that you can manage your finances even better and online payroll option.
• Business Analyzed Checking – if you want to receive detailed statements.

Settle for a merchant account provider

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Now that your business license and your business checking account are in order, you should comparison shop to find the most advantageous merchant account provider. Some of the most important factors you need to check are:

• Whether they charge you a monthly fee
• What is the per transaction cost ( usually between 0.15 EUR and 0.50 EUR maximum)
• Processing and high risk rates? (The high risk rate should not exceed 5%)
• Check whether all currencies are accepted, especially if your online business has an international profile.
• Make sure all major types of credit cards will be accepted

When you have found a preferred provider, you will contact them and ask about the main options. If you like what you have found there then it is time to set up your account. You will need to provide personal information along with business details and estimates + your business checking account. From there on, let professionals handle it. You just sign the contract, and you are ready to accept payments from your worldwide customers, hassle free and quick.

Next, a “buy now” or “add to shopping cart” type of logo is going to be inserted on your website, so that your customers can add the products/items to their e-shopping baskets and be able to pay using their credit cards.

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Opening a merchant account is easy as 1 2 3. You, the merchant contract with a reputable provider, agree to the payment terms (fees, extra charges, rules and regulations stipulated within the contract, etc.) and you are ready to reap the benefits. Your little online business grows bigger and bigger by the day, because you have your business available to a wider audience. People like online shopping, because it is safe, it is comfortable and it is the quickest method of having that last generation plasma delivered right to their doorstep. All these can exist thanks to the online merchant system. But what’s going on behind the scenes? How does the pyramid work?

…because Plastic is Fantastic

Visa, MasterCard, American Express and Discovery are the ruling payment technology companies that make it possible for these cards to exist. Visa, the master ruler detained almost 40% of the credit card market share in 2009, and an exorbitantly 60% debit card share. It is followed by MasterCard with 30% +, American Express with a mere 10%+ and on the last place there is Discovery with less than 5% for both credit and debit cards. It is always important what logo your credit card is bearing, and as far as the merchant accounts are concerned, the payment systems love accepting high brand and secure credit cards bearing any of these logos (considered less risk options).

Banking institutions – the rule makers

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There are many people who actually mix up payment technology systems with banking institutions: Visa is a brand, while the banking institution is the regulating party. All the banks issue Visa or MasterCard logo bearing credit cards, but they all have different rules and regulations. One bank might issue a Visa credit card with a high credit limit and outrageously high late payment fees, while the other bank issues another VISA credit card but with a low credit limit and very advantageous interest rates. The brand of the card simply certifies that the cardholder will have high security transactions and that the card will be accepted anywhere in the world, while the banks are the sharks dominating the money & the rules.

Merchant account services – the intermediaries for a successful business

You, the customer, will go online and search for the desired item. You will check if the respective merchant does accept the payment option you are about to use. If you own a MasterCard, and this is specified on the main page of the merchant, it means that you can safely pay the item you want, and receive it soon, no hassles whatsoever.

You, the merchant, will find the services of a merchant provider very useful and highly advantageous:

• You will be able to accept a wide array of payment options (credit cards and debit cards issued by a great variety of banking institutions)
• In exchange for a monthly fee, you will receive your statement each month- so that you can keep track of your businesses’ money flow.
• You will soon be able to see a boost of your profits, because the traffic to your presentation webpage has increased thanks to the fact that you accept credit card payments.

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Whether you are into the online business selling insurance policies or you do own a physical store selling shoes, the wisest thing to do is to implement credit card processing. The truth is, cash trading is a little bit out of date with both types of businesses, but the most important aspect you should keep in mind is that your profit is going to increase remarkably. Statistics in expert economic consulting clearly point out that the advantages of using credit card processing with your business outweigh by far the disadvantages.

Advantages that speak in favor of choosing credit card processing

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• Credit card customers vs. cash users. People, who use cash for their shopping trips, will most likely have a well-defined budget. This means, they will not be able to buy any (costly) extra items, because their budget does not allow it. On the other hand, a customer using the credit card will never have a specific amount in mind (a limited budget) for shopping. This means a greater chance of raising the profits for you.
• Impulse shopping.  When a customer enters your store with a fixed budget in cash, even if he wants so badly that 15” flat screen monitor you have on sale, he simply cannot afford to buy it. Nevertheless, when someone holding a credit card with a decent credit line attached enters, if he/she likes that item, he will buy it without any second thoughts. Credit card processing will actually bring about more impulse shoppers to your business, which again means a higher profit to you.
• The image of your business. Just think about online businesses that do not accept the VISA logo bearing plastic cards. Do you trust those businesses? No, you don’t fully trust them, because the fact that they accept only e-wallet payment options may raise the question whether these are truly legit businesses or not. Sort of the same happens to your business if you accept only cash payments: customers with generous credit lines will simply avoid shopping from you.
• One sized measure fits all your needs. Credit card processing is a viable solution both for offline and for online businesses. If you do own a website where you promote products and/or certain services, all you need is a merchant account, which will let you accept credit card payments from your customer. Moreover, credit card processing is very important if you do deliver items internationally (or if you would like to go global with your business). The more you expand your business, the more customers you will get, and gradually your profit will increase too.

Your business rolls, no worries for you

Merchant accounts simplify things for you, and you will be able to monitor so much better your cash flow. All the funds you receive will be automatically deposited into your banking account, and with the help of the different reports you receive, you have the opportunity to assess your budget very easily whenever you want to.

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Merchant account is an account that is opened by a merchant to enable him get payments made through credit cards. This type of account can be accessed through a bank or any credit card company. There are various types of merchant accounts that you can choose from when you are seeking to open one. The choice will depend on various factors of consideration. There is a retail merchant account that has the lowest fee charged for the transactions that are made by the merchant. This account is known to have strict measures that are supposed to be adhered to. Some of these include the necessity of passing the card through a credit card terminal and requires a high rate of credit card sales to be made. It is commonly used in restaurants and other small-scale businesses such as hotels and grocery stores.

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Moto Merchant Accounts

There is a moto merchant account that you can opt for. This is a form of mail order that is done through the use of telephone order. It is used mainly when there is a problem with the credit cards and therefore swiping of the cards is not possible. This is done by the information of the credit card into a terminal that is found on a personal computer using web browser for the process of transaction to be completed. It is done at the website of the service provider. This normally cost higher rates when used.

Internet Merchant Accounts

There is an internet merchant account that has the same features like a moto merchant account though it is used for transactions that are carried out through the internet. This can be used by merchants who have internet accounts for payment of services to process credit cards payments. The account has a customized HTML design that is used in the shopping cart provision.

Making The Best Choice

The choice of the best merchant account depends on the kind of business that you seek to venture in. the cost of the transactions is also important based on the number of times or frequencies you will be using the account for transaction. You should also know the terms and conditions of each account before you open or sign up for one. This will help you in choosing the best one that suits your needs.

Consider the flexibility of the account just in case it has provisions that are favorable then you should settle for it. You should also compare the discount fees that are offered by the various merchant accounts, the account limits and the terms of the contracts. Get a merchant account that allows you to negotiate for lower processing rates when there are consistencies in the transactions mace using the credit cards. Consider customer service of the service provider.

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Why Merchant Accounts

Merchant accounts enable you to process credit card payments online. Some of the cards that you can process include Visa, MasterCard and other types of credit cards that you may choose to use for online transactions. You also need a payment gateway that enables the information of the transactions made to be charged to your bank and therefore the processing of the data and transaction to be completed.

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Running an online business can be demanding especially when it comes to the terms of payments. However, with the introduction of the online merchant accounts, this problem can be dealt with effectively. This is an account that enables the business owner to accept a wide number of credit card payments for the transactions. This has become a must have for any merchants wishing to take credit card orders. There are a number of benefits associated with this account.

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Key Benefits

The key benefit that the store owner rips from a merchant account is the ability to accept a variety of credit cards. The merchant accounts are usually obtained from the credit card companies, banks and other payment processors. With these service providers able to process a wide variety of credit cards, this account enables one to accept a wider variety. This has helped many online merchants to make more sales since more clients are attracted to their business due to their flexibility in the mode of payment. One is able to accept the MasterCard, American Express, Visa, Discover and many other credit cards.

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Major Benefits

Another major benefit that the online merchant rips is the tremendous increase in sales. The merchant accounts ease the transaction process. This helps in the making of the purchase process effortless thereby encouraging more people to purchase from your store. More customers will be willing to do business with you since there is ease in the transaction process as well as a wider selection when it comes to payment options. Due to this reason, the happy clients will refer your business to other people thereby leading to rise in traffic.

Security Benefits

Security is yet another benefit that the online merchant enjoys. When it comes to online purchases, security is usually the top priority to most of the online buyers. There being no direct money transfer when using the credit cards ensures security to the customers. Moreover, since all the payments are done by the credit card processing company, the online merchant is able to avoid losses due to fraud. This reliability in terms of security will definitely attract more people to do business with you.

On the side of the store owner, there is better track of all the transactions made in a particular period. With a merchant account, monthly statements are usually sent to you so that you can follow up the transactions made in that particular month. This can be quite helpful when preparing tax as well as handling any misunderstanding. The statements help the online merchant to manage their finances properly and handle all the tax issues effectively.

Setting Up

The setting up process of the merchant account is not so complicated. It usually comes in three types; Retail, MOTO and Internet Merchant accounts. In this case, one requires an Internet Account. This account has a virtual payment service gateway that aids in the processing of the credit card payments. These options are today being incorporated with most of the business web hosting packages. They also have customized HTML forms as well as shopping cart applications.

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If you like to start your high risk business like online gambling and auctions, you need to activate your offshore merchant account for enhancement of the speed transaction.  The main job of offshore merchant account for processing credit card is to help entrepreneurs to open offshore merchant accounts for getting credit and debit cards to support the overseas dealing perfectly.  If you have the strong wish to run the pharmaceutical business in an international market, you should require your offshore merchant account for doing overseas trading.  If you surf internet you will come into contact with a number of overseas merchant account credit and debit card processing centers online which are located in different parts of Eurasia, Central America and ME.

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Advantages of the Activation of Offshore Merchant A/C

There are a number of benefits which you can enjoy after activating your overseas merchant account.  You will get good opportunity to do online overseas trading smoothly without facing any shortcoming and trouble.

If you are interested to play gambling in online casinos, it will be more convenient to open offshore merchant account as the domestic banks will not take risk by allowing you to open such an overseas account just for doing high risk trading.  There are many countries in Asia and Middle East where online casinos and auctions are not legally authorized.  National banks will not allow you to do online transactions through domestic or national banking sectors.

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Additional uses of offshore merchant accounts

National banks will put restrictions on the volume of salable products and services. This type of restriction will obstruct the way to enhance smooth profit making business. Offshore merchant account is free from such legal bindings.

Flexibility in foreign taxation system.  Offshore Merchant account processor will not impose huge taxes on entrepreneurs who are eager to activate their offshore merchant accounts for making perfect deal. You will get full backup and assistance from customer care unit if you have any confusion in relation to offshore merchant a/c, credit and debit cards.

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Offshore Merchant Accounts Offer Various Services

Entrepreneurs will enjoy liberty to use their credit and debit cards any time.  Offshore merchant accounts are open and in activation round the clock. As these credit and debit cards support online transaction and net banking, you can withdraw or deposit money through electronic transfer from any corner of the world.  In addition, the powerful and highly competent automated billing software tools generate bank statements and credit reports at high speed.  You will be able to process regular, weekly, monthly and yearly credit reports and bank statement.

Furthermore, you will get detailed report about the present status of your offshore merchant account.  Your personal details will not be leaked.  The sophisticated monitoring system will keep the track of your overseas merchant account on 24×7 basis. There are a number of SSL and or 3D Secure hacking detection software devices which will provide accurate information about any fraudulence and hacking. Therefore, your Visas and MasterCard will be highly protected during online transaction. Online dealing is always speedy and less time consuming. The whole internet based transaction will be competed within 5-10 minutes.  It is advantageous to a busy businessman who has little time to do transaction for an hour.  Highly upgraded AVS and CVV2 software accessories will definitely help you to overtake charge back or reversal of fund problem.

An overview of offshore merchant account

Offshore merchant accounts for credit/debit card processing system are cost effective and user-friendly to those who want to earn easy bucks by doing high risk business through internet. You will be offered full security and protection of your personal wealth and financial resources.  Even you will have the golden opportunity to exchange multiple currencies through this offshore merchant account. The competent account managers and verifiers will verify your legal documents and give you proper instruction to activate your offshore merchant accounts for using your Visas and Master cards for supporting financial transactions.

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The fact is that most of the businesses that are using merchant account services are paying their merchant account providers extra money. The merchant account services are mostly overpriced and take more money than the services being utilized by your business. There are certain fees that are customary and are deducted every time a credit card transaction is done. For most of the businesses, these are not a problem at all but such high payments can cause losses to small businesses and can largely reduce the amount of profit they are likely to earn.

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How money is charged through Merchant Account Services?

There are some typical costs associated with merchant accounts and there are some ways that can be used to save some money. All of the major Credit Card issuer companies have got a fee for credit card processing fee which is passed by the merchant account to you for privilege of transaction processing. The fee structure of a business depends on factors based on usage that will be discussed here.

The Fee Structure

The fee structure varies depending on whether payments were made from debit or credit cards. The Credit Card issuing company used by an average customer is another factor that determines the fee structure. The fee structure is different for use of a corporate business credit card or a personal credit card. The fee structure also depends on the type of business and the type of products or services that you provide. Another factor determining fee structure is the average purchase amount and monthly purchase amount of your business.

How can you Save Money?

All the things that have been decided earlier effect the rates being charged to you by your merchant account services in one or the other way. You can save these transaction charges by the method through which fees is passed along to you by your merchant account services provider. Following are some things that may help you to save some money.

Merchant account services pass these costs to the business and get their profit from your statement. A business is charged with a discount fee which is a specific percentage of the per sale charges. Another thing is the minimum transaction fee charged monthly, an annual fee and charge back fee. Other charges include fees for terminals and products and rental fees for terminals along with the statement fees that are charged monthly.

Check the transactions and statements carefully

All of these fees should be checked carefully by a business and it should be made sure that the charges of these services are according to the charges that are described in the contract by the merchant account processing company. The merchant accounts have been charging lowest discount rate but on the other hand they charge high transaction fee which makes the overall process a burden for small businesses. Keeping a close look on statements is another way to avoid high charges. Being careful about your business and the fees being charged to you, you can save a lot of money that your merchant account may be taking from you without any reason.

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Not all Merchant accounts are suitable for every type of business. Every business needs a separate type of merchant account so the merchant account meets the needs of a specific business.

Sometimes, you need two merchant accounts if you are selling products with help of a retail store through mail order catalog. One for the retail store and one for the mail order catalog as a single account won’t be able to do the job for you due to the different type of transactions being processed. Depending on different nature of businesses, there are a number of types of merchant accounts that will be discussed here.

Card Present Merchant Account

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Card present merchant account is the account that processes payment when customer and credit card are present at the terminal. These include wireless, retail and Restaurant Merchant Accounts.

Wireless, Retail and Restaurant Merchant Accounts

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Wireless merchant account uses wireless credit card terminal. This enable accepting credit cards on the go and real-time authorization can be obtained. Like retail merchant accounts, these accounts have got low rates and fees but have got high monthly fees.

A retail merchant account is the merchant account where majority of the transactions are physically processed when credit card and owner are present at the spot. During this case, credit card terminal is connected to land line phone through which authorization is done. These merchant accounts have discount rates and transactions fees and are the most common merchant accounts.

Restaurant merchant account is different from different types of merchant accounts due to the process of tips being charged. These type of account charges the grand total with gratuity and any pre meal spending such as drinks or snacks.

Card Not Present Merchant Account

A “Card Not Present” merchant account is the account through which payments are processed when the customer and the card, both are not present. This type of account is mostly used for mail orders and telephone orders. In this type of merchant account, credit card information is manually entered in to the terminal. Such merchant accounts have high risks and have high processing rates and high fees. Such accounts include payment processing through Internet, Mail Order and Touchtone Telephone.

Internet, Mail Order & Touchtone Telephone Merchant Accounts

Internet merchant account is ideal for online businesses that wish to accept real-time credit card payments. These sales are generated from websites.

A Mail Order merchant account can be used for different businesses where credit card information is manually entered through the keypad of a credit card terminal. These come with the lowest processing rate and fees amongst all the “Card Not Present Merchant Accounts”.

Touchtone telephone merchant account is another merchant account that allows credit card processing with the help of touchtone telephones without any kind of equipment or credit card terminal. This touchtone system is provided by another company. This account has a start-up cost and rates are high as a company is handling merchant account and another is handling the touchtone system.

It is necessary to select the suitable merchant account for your business to get the best out of your business.

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Every small business needs some form of payment processing and it is necessary to understand how to select merchant services as it has a great impact on sales revenue and profit. Following are six essential questions for selecting merchant services.

What are Merchant Services and who offers them?

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Merchant services are a method to enable credit card payments from your customers to your business. This account is connected to credit card processer to route payments to your bank account. These services are provided by specialized merchant service providers or independent sales organizations that offer payment processing. Merchant account services are also offered by different financial institutions.

Which company suits small business needs?

It is necessary to check which company suits your needs and this depends on the situation of your business. Banks turn-down home based business owners on the basis that their business isn’t well established. In such cases merchant service providers are flexible options and they are credit card processor who offers services at low rates.

Merchant account is not the only source of accepting as credit cards can be accepted by contracting with companies to process payments on your behalf. Credit card processors are a better option as they charge a small percentage of payment that is received as compared to heavy amount charged by other companies. Merchant account services are a better option to trade online.

Requirements of payment processing

Payment processing can be done if you have the following things available:

1. The first requirement is to have a Secure Server with Certificate to prevent data interception using SSL encryption so that no unauthorized decoding can be done.
2. The second thing is that for customers to safely enter personal and banking information, the order form should be on a secure server.
3. You should have a safe gateway as it is a tunnel that is used for authorization, processing and management of the merchant services.
4. Shopping cart should also be available on your online business. This is software that calculates all the purchases automatically for you. Before installing, make sure that the software is compatible with the gateway.
5. All the things that are mentioned above can be obtained by you but until you have a merchant account, real-time processing cannot take place. Merchant account provides access to processor and makes it able to authorize, capture and settle the transactions that are made.

Alternatives to accept Credit Card payments

Merchant account services are a good way to process online payments. If you don’t want to get in to merchant account services for payments, you can outsource them to a third party who collects customer data and rest of the work is done to process payments for your business.

Apart from this outsourcing method, credit card payments can be accepted online with help of deferred payment processing. In this method, customer inputs data which is received by you manually without any gateway. This method has the advantage that each order can be checked and corrected. Such solution is not ideal as it can be time consuming for numerous payments.

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