Most people assume that they can just use their regular bank account when they set up their new company. While it is true that this can be done, it is not always the best idea to mix business and pleasure in this manner. Most enterprises prefer to use dedicated business merchant accounts in order to keep their accounts manageable and comprehensible by the time the end of the year rolls around.

Business Merchant Accounts

Another reason for maintaining separate business merchant accounts is that these are generally established for the purpose of accepting credit cards from their customers. The rub with these types of account is that all of the credit card gateway providers insist upon two-way access for the account that services one’s credit card transactions. In other words, not only can they deposit money into your account when a transaction is approved, but they can also automatically withdraw money back out if a transaction is later cancelled or voided in some fashion.

This is not a question of sinister intent, but merely of common business practice. However, one would not really want other people to have free access to any funds other than the ones specifically derived from  credit card transactions. It is much better to keep a separate general business account as well as a separate personal account that is not subject to someone withdrawing money from the account without your knowing about it.

The issue is not whether such action is justifiable, but whether it might cause you heartache through spending money which you assume is in the account but has actually been withdrawn without prior notification. This can unwittingly damage a business reputation that is otherwise sterling. Because we live in an era where credit cards are a major part of any businesses revenue stream, merchant accounts are an absolute necessity.

Insulating one’s general affairs from credit card fraud, hackers, or simple reversed payments is a wise precaution as well as an easy way to track the relative percentage of credit sales as opposed to cash sales.

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The ability to accept card payments is now virtually indispensable for any business which sells any type of goods or services. For online shopping it is obviously essential, but it is increasingly the case that customers visiting physical retail stores assume that they can use their cards there as well. Enterprises without business merchant accounts are likely to find their customers go elsewhere, and no business can afford to lose competitive edge to that extent, especially in the current economic climate.

Business Merchant Accounts

As well as ensuring you do not lose customers, having a merchant account is important for many other reasons. It is likely to increase sales volume, especially in a physical store, as customers will be tempted with impulse buying and special offers. In addition, it is important for you to be able to track your financial data, for instance for filing your tax return. When you have a merchant account, your provider sends you a monthly statement detailing all your transactions, making it easy to see at a glance the total of your expenditure and outgoings, and how much of your takings are actual profit.

You are more likely to obtain a merchant account from a credit card processing company than from your normal bank, although your bank may refer you. Most companies provide the card machine free of charge, and many also offer round-the-clock support to ensure you can implement the system. Depending on your type of business, you can apply for an OTC (over-the-counter) account for a retail store, or an Internet Merchant Account (IMA) if you have an e-commerce operation. If you accept payments in several different ways, you will benefit from a MOTO account along with your IMA provision, for mail order and telephone order payments. This provides you with a virtual terminal on your computer, so you can process payments from all over the world.

Without business merchant accounts, no enterprise is likely to survive in today’s world. The competition will simply forge ahead. However, if you are looking for a way to increase your profits, protect yourselves and your customers from fraud, and maximize efficiency, there is really no other way to go.

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Every type of business can benefit from business merchant accounts and online payment gateways – established companies, small businesses and even those starting out. Credit card processing both increases a company’s market reach (and therefore profit) and enables business owners to manage their companies more effectively, with monthly statements which record every sale. Currently, the firms offering this kind of service are Independent Sales Organizations, Merchant Service Providers and banks.

Business Merchant Accounts

Banks are a reliable and safe option. Usually preferred by bigger companies, they are professional and stringent with their regulations and rules. ISOs (Independent Sales Organizations) enable companies to utilize the ISO account for a charge. Although the rates are more expensive, you are not bound by any contracts, and you can become more involved with the transactions because they are not regulated so much.

A Merchant Service Provider could be a bank, an ISO or a different financial institution. Aside from the business merchant accounts they provide, they handle credit card processing as well. This is best suited to small companies, because other institutions might not permit them to accept internet payments if they only have a limited history of trading.

On the downside, the credit card firms charge a modest percentage for each transaction. This can range from 1% to 3%, based on the firm. Also, if customers are not happy with your service or product, a refund might be issued. If this occurs too frequently, the credit card firm has the power to freeze your account.

Although the drawbacks are unfortunate, the advantages still outweigh them. If a business is to prosper in this economy, it has to keep up to date with modern technology. Business merchant accounts offer quicker transactions for customers. Also, they expand a company’s customer base, which small businesses in particular can benefit from.

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