A Simple Merchant Accounts Overview for Small Business Owners
Many small business owners like to keep things as simple as possible.
Running a successful company is hard enough no matter what the size,
but it seems like the little guys oftentimes have the toughest road
ahead of them.
For this reason, many small businesses may be
hesitant to the idea of processing credit and debit cards. They figure
it will be too much to juggle so they stick to cash.
with this line of thinking is that these businesses are missing out on a
wide range of customers who expect to be able to pay with their debit
or credit card. The fact is that signing up for a merchant account to
process credit cards and provide other services doesn’t make running
your business more complicated, it makes it easier and more profitable.
Here is a quick rundown of some of the ways a merchant account can
benefit your small business.
Credit Card Processing
The ability to accept credit cards isn’t just a handy thing to have at the cash register. Credit card processing can also be extremely useful if you want to expand your business onto the Internet.
way it works, at least on your end, is simple. Once you have either
swiped your customer’s credit card or they have punched it in on your
website, the transaction goes through a complex process that is handled
by your merchant account provider. Then the money is deposited in your
bank account in approximately two to three business days.
credit card purchases can be processed in two different ways: deferred
or real-time processing. With real-time processing the transaction goes
right through. This is convenient for Internet businesses where the
customer expects to get the product instantly. An example of this would
be a band that is selling mp3s right from their website, or a small
publishing house selling documents or novels online.
difference with deferred processing is that the order is sent to you to
review and process later. This is useful if you have someone ordering a
product through your website and you actually have to physically ship
something to them. It gives you a chance to make sure the order is right
and you have everything in stock before you charge the people and ship
Deferred processing is also handy if you receive a lot of
orders from foreign countries. If the customer’s credit card network is
down for some reason the transaction won’t necessarily be cancelled
immediately. Deferred processing allows you to just make a simple phone
call when the network is back up to allow the transaction.
Debit Card Processing and e-Checks
you have an actual storefront with a swipe terminal then debit and ATM
cards will be processed exactly like a credit card. The only difference
is that the funds are taken directly from the customer’s checking
account, but it all works the same on your end.
E-Checks are just
another way that your customers can purchase items from you on the web.
They work just like paper checks except they don’t require the buyer’s
signature. All you need to process e-Checks is the name of the bank, the
account number, and the routing number.
There are a few
different ways you can process these e-Checks. There are software
applications available that allow you to print the check out and deposit
it in your bank account. The downside is that, like a regular check,
you have to wait a few days to make sure it clears.
You can also
set up a transaction service to process the checks. It looks to make
sure everything is accurate and can also, for a fee, guarantee the
check. Then they will reimburse you if it bounces.
a merchant account you can also set up escrow services. You really only
have to worry about this if you are selling very expensive items and
your customers want a bit of extra security.
An escrow service
is, quite simply, the middleman. The way it works is fairly
straightforward. Your customer pays the escrow service for your product.
The escrow service then notifies you that the payment has been made so
that you can ship the product out. Once your customer has received the
merchandise and is happy with it they tell the escrow service, and you
get your money.
If the customers aren’t happy they can ship the
merchandise back and tell the escrow service that they want their money
back. The seller has about a week to inspect the item before approving
As you can see there is a whole world of
possibilities when you sign up for a merchant account. It can help your
company at its physical location as well as on the Internet. A merchant
account gives your customers more options to pay for your products,
which will be sure to help grow your business. Simplify and expand your
small business by signing up for a merchant account today.