10, Jan 2013
Understanding Business Merchant Accounts
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.
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.