Choosing the best merchant account is essential if you want to have a smooth and successful business operation. Whether you are launching an e-commerce site or you have a brick-and-mortar store, being able to accept credit card and online payments is critical.
With so many providers and account types available, how can you be certain which is best for your needs? Here’s a step-by-step look at how to make an informed decision.
Understand What a Merchant Account Is
A merchant account is a special type of business bank account. It allows you to accept and process electronic payments as well as card transactions. These accounts work as a sort of agreement between your business, a payment processor, and also a merchant acquiring bank.
Funds from customer purchases are deposited into this account then they are transferred to your business bank account.
Consider Your Business Type and Industry
The nature of your business will.play a big role in determining the type of merchant account that you will need. For example, businesses that are considered high-risk usually need specialized merchant accounts that can handle much higher chargeback rates as well as compliance regulations.
Special Considerations for High-Risk Businesses
If you operate your business in a high-risk industry, such as CBD, gaming, or supplements, you are going to need to find a merchant account that will cater to your specific compliance as well as transaction needs. For example, if you are wondering how to find a CBD merchant account, it is best to start by searching for providers that specialize in high-risk processing. Make sure they have experience with regulatory challenges.
Compare Fees and Pricing Models
Merchant accounts often come with a variety of fees, and it is important to understand these fees before signing up. Common fees include:
- Transaction fees: This is a percentage of each sale that you make.
- Monthly fees: This is a regular service or statement fee.
- Setup fees: These are the Initial charges you can use to establish your account.
- Chargeback fees: Costs are usually incurred when a customer disputes a transaction that is made.
Look into pricing models as well. Options such as flat-rate pricing, interchange-plus pricing, or tiered pricing will affect the overall costs that you get quite differently. It all depends on your sales volume.
Check for Integration and Compatibility
Your merchant account must always integrate seamlessly with any or all of your existing sales systems. It doesn’t matter if it is an online shopping cart, a point-of-sale (POS) system, or even accounting software. Compatibility will minimize disruption and help you with accurate record-keeping. It is also worth considering if your provider supports recurring billing, and mobile payments. Check if they offer e-invoicing as well.
Assess Customer Support and Service
Technical issues as well as payment disruptions will often cost your business both time as well as money. That’s why having strong customer support is always a non-negotiable. Look for 24/7 availability, if possible as well as multiple contact options. You should at least have phone, chat, email available as well as knowledgeable support staff.
Evaluate Security and Compliance
Choose a provider that prioritizes your security. You should also have fraud detection tools, and end-to-end encryption as well.
Ensuring that your account is secure will protect your business and build trust with your customers too.
Read Reviews and Get References
Don’t just rely on the marketing materials. Make sure that you check independent reviews and testimonials too.
This will give you a clearer picture of each provider’s reliability as well as customer satisfaction. If possible, you should ask the provider for client references specific to your industry.
Plan for Growth
Your ideal merchant account should always be able to scale with your business. Look into whether or not the provider offers options that will support multiple locations, and currencies. You may want to see if you can get cross-border transactions as well. Flexibility can save you from having to switch providers later on when you really start growing.
Understand the Application Process
Make sure that you understand the application process. Applications for a merchant account can vary quite widely depending on your business type as well as the provider.
You will typically need to provide business documents, some processing history, as well as bank statements, and a credit check. Be prepared for this and work with providers who will clearly explain their requirements.
Choose Wisely
Choosing the right merchant account will take some research, and planning on your part. You will need a clear understanding of your business’ specific needs.
By evaluating your fees, compatibility, support, as well as scalability, you will be well-positioned to select a provider that supports your long-term growth.
