If you’ve come to this article researching what you’ll need for a new business, even a home based business, consider how important a role credit cards will play in the success of your new enterprise. Especially if you’re doing business online, you’ll do the lion’s share of your transactions with some type of credit card, both to pay your own expenses and receive payment for your goods or services. And to receive payment, you’re going to need a merchant account from a reliable merchant account provider.
In its simplest definition, a merchant account allows a business to
accept credit cards in all their forms through a
credit card processing firm. The cards accepted can range from traditional credit cards, debit cards, and electronic gift and point redemption cards. For a fee, the credit card processing firm handles all the transactions electronically. With a merchant account, business owners are able to offer their customers the ease and convenience of modern purchasing power.
Make no mistake: experts in technology and culture believe we’re heading to a “cashless society,” in which credit cards will become the dominant means of currency exchange. Having a dependable merchant account provider and/or credit card processor allows you to keep pace with this fundamental economic shift. Choosing the right credit card processor allows you the freedom and security to gain an edge over your competition.
The basic piece of equipment involved in your merchant account / credit card processor relationship is something you’ve probably already used on the customer end a thousand times. This is the small machine known as the terminal. Traditionally, credit card terminals used phone lines to dial in and request approval for each credit card transaction. With the advent of high speed internet business operations, however, high speed terminals are gradually replacing the older models and providing blazing fast transaction completion time. Some cellular networks are now also offering the same feature. Merchant account holders usually receive the terminal at little or no cost from their provider, or they may rent them.
In return for their services and equipment, merchant account providers usually expect a series of fees. These fees are spelled out in the service contract between the provider and the business, in a listing called a fee schedule. Reputable merchant account providers will post their fee schedules openly and with complete transparency regarding the meaning and frequency of each charge prior to formalizing an agreement with a client.
Many credit card processors and merchant account providers will also offer shopping cart software to their clients, around the clock technical and business support, and security software guaranteed to render each transaction safe. Their services and sample fee schedules are usually available on their website.