FAQ About Merchant Services
What is a merchant account? A merchant account is set up between a store or service provider and a bank willing to process the business' credit card transactions. If you want to be able to accept Visa, Master Card, American Express, Discover, and other payments from your customers or clients, it is imperative that you establish such an account.
Do I need one to process transactions online? There are some online systems that do not require a business to have a merchant account in order to receive credit card payments. However, these set-ups are generally designed to be used by very, very small businesses or for occasional transactions. If you expect to have a large volume of sales, it is both more efficient and more affordable to sign up with a real merchant bank.
Will I be required to sign a contract? Yes, contracts are typically required. They range from 12 months to several years, and the length of time you commit to can impact the rate you will be paying. An early cancellation fee will sometimes apply if you decide to discontinue the service, although some providers will require you to continue paying on the contract even if you go out of business. Make sure to get the specifics up front.
How do I know if my business is low or high risk? Businesses are classified into a risk level based on the industry in which they operate and sometimes the company or business owner's credit history. Gambling and casinos, adult-oriented entertainment, and MOTO sales are considered high risk. Restaurants, bars, grocery stores, and other brick and mortar companies that use card swipe equipment in person are lowest risk, and have the easiest time finding low processing rates.
What kind of fees should I expect to pay? Fees vary depending on your risk level. We have years of experience finding the best rates for all industries, though, and you can rest assured we will locate the best possible merchant account for your needs.
How can I minimize chargebacks? The best way to limit chargebacks is to use card swipe equipment and operate a store or other service locally, rather than online or through the mail. However, using CVV2 codes for added security can help to eliminate problems when selling online.
Do I really need to accept credit cards from my customers? Some local shops and stores try to avoid dealing with plastic, but most people today prefer to pay with debit, Visa, and Master Cards. Choosing not to handle those payments can cause you to lose money and appear inconvenient. Remember, the majority of clients who walk away, promising to come back with cash at a later time, will never return. Having a merchant account makes it more accessible for people to buy things from you.
Which credit cards should I accept? Visa and Master Card are the most popular forms of plastic, but don't underestimate the power of American Express and Discover as well, both of which tend to offer special benefits that encourage their use. Other bank cards are sometimes included with your merchant service agreement.
What are the start-up costs? Costs vary depending on the account you set up and whether or not you purchase or lease card swipe equipment.