For a small business today, the ability to accept credit cards directly is one of the most crucial factors for its success. The use of credit cards and debit cards only continues to increase with each year. As such, a small business, especially one that operates online, has no choice but to be able to carry out transactions using these cards. Otherwise, it risks losing out on a huge amount of business, which would result in decreasing sales and eventually lead to failure.
A small business can accept credit cards directly as payment if it has a merchant account. Therefore, choosing the right merchant service provider is inherent to the success of a small business. This endeavor is not a small matter. The wrong choice could lead to business failure while the right choice could lead to success and eventually, even business expansion. With all the available merchant service providers today, how do you evaluate merchant service providers and their merchant accounts?
Normally, merchant service providers charge a set up cost for you to establish your merchant account. There are some merchant service providers that offer low set up costs or even “free set up.” You should, however, beware of the free offers as they often find ways to charge you extra in other operating fees. A reasonable set up cost would range from $200 to $500. More so, you might want to look into the equipment costs, if any. See if the merchant provider will include the equipment for free or low charges. Otherwise, you would have to incorporate this into your calculations.
It is vital that you project your sales in terms of total monthly volume and transactions. This is because there are merchant accounts which charge fees depending on these factors. Determine if your projected revenue is going to be worth the total expenses. Not all fee structures are the same and that is why you have to be specific about this.
Again, your projected monthly transactions would be crucial. If the merchant account has a cap on monthly transactions and you go over it, then you would be charged hefty fees that just might place a dent on your income. This normally happens during peak season – November and December. Find out if the merchant service provider will grant a temporary increase in the limit for such periods. Also determine if the monthly limit is within your range. Otherwise, you account would be frozen if you go over the limit and obviously, this would spell disaster for your business.
As mentioned above, not all fee structures are the same. Just because one fee structure works for another small business is not an indication that it would work just as well for your business. Determining your needs and capabilities is the first step. Then compare these with the fees charged by the merchant service provider. See if they tally and if your revenue will be more than the expenses that would be entailed due to the fees. More so, read the fine print. Otherwise, you may miss out on other charges.
One factor to consider here would be your operating hours. If your set up is online, the chances are that you accept transactions round the clock. As such, your merchant service provider should also provide the same hours for support. More than that though, find out if you can have information regarding the reliability of their customer support. You wouldn’t want to be caught in the middle in case your customers encounter a problem.
How is this important for you? Having online account access will allow you to monitor your account manually, anytime that you wish to. Monitoring your merchant account on a regular basis is important because this is one way to detect and prevent fraud. Though you always get a monthly statement, it might be better if you can check your own account anytime that you wish to. This is especially important if you want to be vigilant regarding transactions.