What You Need To Know About A Merchant Account

As long as your website has incorporated the merchant account services through a guaranteed secure server to protect the personal data of potential customers, more and more people are prepared to give their credit card details online in order to make the purchases of their choice.

There is no getting round the fact that you will need to have a merchant account in order to accept credit card payments through your website and make money online. One option worth mentioning here is using an alternative to a bank merchant account, which is a secure payment service such as a Paypal account.

The majority of bank merchant accounts come with really strict approval conditions and they will often decline their merchant account services to small businesses, work at home businesses or businesses with a high risk factor associated with them.

Paypal (which is like a credit card merchant account in a way) provides you with the option of setting up a personal account or a business account. Setting up a business account gives you greater functionality including the facility to accept payments by credit card or directly from other Paypal account holders. This means you can conduct business knowing your information and that of your customer base is secure without the need for a full blown internet merchant account.

So, obtaining a merchant account for home or small businesses may not be that easy. If you need your business to accept credit cards online, you still have a variety of options open to you to enable you to accept online payments.

The beauty of PayPal (or similar types of online payment processing accounts) is that it is an online credit card payments option for all businesses that have a PayPal account. There are some exceptions but very few compared to being accepted by a bank merchant account.

A business Paypal account can be set up within a few minutes and can be a very cost effective alternative as charges are made on a transaction basis rather than with the overhead of a bank merchant account’s monthly fee, which may be cost prohibitive for many small businesses.

Setting up shopping carts, one-off payments, or monthly subscription payments is relatively straightforward and they provide graphics and tools with which you can create the online payment information for your websites. Also, the transfer of funds to your business bank account from your PayPal account is secure and very straightforward.

There are alternative services that provide merchant account facilities including a full e-commerce business solution, but Paypal is the most well known and is truly global covering all of the main languages.

Although payment processing services like Paypal are convenient and great for small businesses, if you know your business is going to continue to grow or you want to have complete control over the buying experience of your customers, you may want to consider a bank merchant account.

Let’s look at the advantages and disadvantages of setting up and maintaining a bank merchant account:

• A bank merchant account allows you to accept all types of credit cards.
• Unlike Paypal, the customer does not have to leave your website.
• This gives you complete control and reduces the risk, if any, of the transaction failing.
• With a bank merchant account system you retain all the customer data on your database, so again you stay in control and the data is available for your own business reporting purposes.
• To obtain a bank merchant account you will need to go through an approval process.
• A bank merchant account normally has a minimum contract period of e.g. 6 months and you will be required to pay a monthly fee.
• Unlike Paypal where you are paying only for the profitable transactions you complete, you will be required to pay the monthly fee of a bank merchant account whether your customers buy anything or not.

If you are unsure what merchant account service is right for your business, check out a Paypal account as an alternative, check out the online merchant account options including those that provide a full e-commerce solution, and discuss your merchant account business needs with your bank. Then you can make an informed decision as to what merchant account facilities you need now and what you may need in the future.