Posts Tagged ‘merchant accounts’
Merchant Accounts: ISOs vs. Banks
Friday, April 4th, 2008
As you prepare to set up your business merchant account, you may think the logical place to start your search for a merchant account is your bank. After all, they handle the rest of your money. Why not let them handle your business transactions?
You may want to rethink that idea.
While you may think having all your accounts at one bank should give you special advantages when it comes to opening a merchant account with them, this isn’t always the way things will happen.
Banks don’t look at merchant accounts the same way they look at your savings and checking accounts.
Part of how they look at you is going to depend on how you do business. If you have a traditional brick-and-mortar store, you probably won’t have a problem going through your bank to set up a merchant account.
However, if your company is more technologically based, and you run your business through the Internet, it may be a different story.
Banks and Internet-Based Businesses
Banks do not trust Internet companies as much as they trust traditional storefronts. They figure an online company can be here today and gone tomorrow, and consider doing business with them a much greater risk.
This is taken into account when they are deciding whether or not to set up merchant accounts, and this is where you can hit two obstacles.
First, they may decide not to trust your company, and therefore deny your merchant account application. The other thing that may happen is that they will approve your merchant account, but then increase your transaction charges, since they consider your business a higher risk.
If you run through a large number of transactions each month, those increased charges can add up to a lot of potential profit for the bank - and less for your small business.
Money Matters
When deciding to use a bank for your merchant account, you have to consider what it is going to cost. While they may want to give you great rates, they may not be able to offer better rates than an Independent Sales Organization (ISO).
The reason for this is that many banks go through ISOs when it comes times to process credit cards. Strange, but true.
Processing credit cards is what ISOs do. In fact, they do it so well that the banks have stopped doing this and send their business to ISOs instead. In most cases, by using an ISO they can save money and time.
What this means is that if you decide to go to your bank for a merchant account, they are still going to send those transactions to an ISO to process. It’s just one more step to get to the same goal - and you are likely going to pay more for that extra step.
While both your bank and an ISO can do the same job, you should never assume that your bank will take better care of you since you are a loyal customer. Instead, shop around to get the best rate on a merchant account to increase your company’s bottom line.
Tags: Accounting, banks, Finance, Finance and Accounting, financial accounts, independant sales organization, ISO, Leeia Ladipoh, merchant accounts
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Do Visitors Feel Safe Buying From Your Website? If sales are down, it may just be that your website needs a revamp!
Thursday, March 27th, 2008
If you have a website, the best thing you can do for business is to make it look professional and safe for your customers. We’ve all stumbled upon websites that look like they were created years ago and have never been updated since- leaving potential customers to wonder if the company is even in business anymore. It’s doubtful anyone would feel comfortable placing an order and giving their personal credit card information to a website that looks shady. Here are some tips for making visitors feel safe and secure when they’re on your website.
Be sure your website looks up to date - Think of your homepage as the front door to your store. It should be professional, inviting and modern-looking. If your website looks old and outdated, then visitors will assume your products and services are too. Be sure to check your website often and remove out of date products or listings.
Set up a merchant account - While accepting Paypal may be easier and cheaper for you, it’s not exactly professional. It may leave visitors thinking twice about purchasing from your website and give them the incentive to go back on Google for another search. Having the ability to accept Visa, Mastercard, American Express and Discover doesn’t take much effort and there are plenty of companies that offer merchant account services.
Set up a “Contact Us” page - Many visitors want to know that there’s a real company behind a website before they order. So, offering as much information as possible will leave visitors feeling better about the reliability of your company. Email addresses should always have the address of the website and not @hotmail, or yahoo, gmail, etc. A phone number should never be your home phone number - having someone answer “hello” or having someone on a second line pickup and start dialing is a certain recipe for disaster. Stick with a call center, dedicated business line or even a cell phone. If you can, list the street address of your company. Remember, the more information you can give out, the more your potential customers will feel ready to become actual customers.
Make checkout easy - A true-tale sign of a new or small business is an archaic checkout process. Ideally, the your store’s checkout should be four or less steps. Keep it as simple and as short as possible, without asking customers to first sign up to be a member or requiring that they answer a set of unnecessary questions. Also, make sure that it’s easy for customers to look at their shopping cart and then continue to shop - otherwise, you’ll end up with frustrated customers who may leave your site for good.
It doesn’t take much effort to give your website a professional look that makes visitors feel at ease, never even questioning the reliability of your company or the safety of the website. You’ll be amazed at how just the look of a website can increase customers and decrease shopping cart abandonment rates.
Tags: Carrie Hinkel, customer loyalty, E-Commerce and E-Business, merchant accounts, Web Design
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How to Set Up a Merchant Account
Thursday, November 8th, 2007
A merchant account is an absolute must for virtually any online business these days. A merchant account allows you to accept credit card payments from customers online. When a customer pays for a product or service, the merchant account provider will move the amount of payment from the buyer’s account to the seller’s account. Ready to get your own merchant account ? Here are the steps to follow:
1. Choose a bank and apply for an account. Choosing a bank can sometimes be difficult due to complex payment structures. To get around this, try speaking to a representative of that bank. Ask exactly what fees are included and what you will be paying with their service. You should go with the bank that offers the best and most services for the best price.
The fees are not just set fees, either. If the bank perceives you as a higher risk, the fees will be higher. A lot of the risk depends upon chargebacks too. For example, if a customer feels as though they have been fraudulently charged, they are able to have the money returned to their account, with usually no questions asked. If a company is determined to be high risk for chargebacks, the fees will be higher. Some niches do have more chargebacks than others.
2. Gather your business information. After you have chosen the bank, you will be required to submit certain information. This information will also have to do with the types of fees you will have to pay. Some of that information may include your business history and performance, your predicted turnover, average transaction value and frequency, the type of goods you sell, and information about your suppliers. Depending upon the bank through which you’re applying and the sort of company you are, you might be required to supply even more information than that.
With most banks it will take between one and four weeks in order to set up your merchant account so that you are able to begin taking credit card orders. Once you have a merchant account, you should try your best to limit your chargebacks. You can do this by simply providing a lot of information about your products, and even calling the customer to confirm a larger order. This way, you minimize the chance of your customer not receiving the product or getting something that they didn’t actually order. You can read more about this in our recent article Reducing Chargebacks to Your Account .
Merchant accounts are very convenient for customers and companies, and to survive long online, they are pretty much necessary. Without one, your business is missing out on sales.
Tags: chargebacks, E-Commerce and E-Business, merchant accounts
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