Because many customers prefer to use credit or debit cards instead of cash, merchants can benefit from a merchant account that allows the processing of credit and debit payments. Credit card processors often meet this need, but with services that can include a barrage of fees, contract requirements and processing considerations. To ensure the best arrangement, merchants should prepare to navigate complex merchant account agreements.
What Are Your Fees?
Credit card merchant accounts often come with myriad fees and charges that can include both monthly and per-transaction costs. Monthly costs -- like access fees, gateway fees and statement fees -- vary considerably from one provider to the next, and some providers may charge high fees while others charge none at all. Some providers also allow merchants to avoid a monthly statement fee by retrieving statements online, but others may charge for online retrieval. In addition, many credit card processors charge a fee on each transaction, though the structure of this fee can vary. Some providers charge a fixed rate per transaction, others charge a percentage of the transaction amount, and some charge both a fixed and percentage fee. Credit card processing agencies typically disclose fees on their websites or in merchant literature, but according to the financial organization Intuit.com, some processors do not publish complete rate charts.
What Cards Can I Accept?
A merchant's expectations may vary considerable when signing up to process credit cards. According to the merchant information website MerchantSeek.com, most processors handle Mastercard and Visa transactions, and many also allow merchants to accept Discover and American Express. Some processors also handle more esoteric credit cards like JCB and Diner's Club, and a few processors allow merchants to issue and accept their own gift cards and private label payment instruments. MerchantSeek.com cautions merchants, though, that many overseas processors cannot handle domestic cards like American Express and Discover, so business owners should thoroughly investigate a foreign provider.
Do You Require a Contract?
According to the business organization MerchantCouncil.com, some credit card processors require contracts that make it difficult for merchants to cancel services without incurring large fees. MerchantCouncil.com encourages merchants to work with processors that do not require contracts. If a contract seems unavoidable, merchants should review the provisions to become familiar with cancellation fees and escape clauses.
Do You Support Web Payments?
A merchant who accepts payments online or over the phone may benefit from a virtual, web-based credit card terminal. These terminals can offer easy accessibility and lower equipment costs. According to MerchantSeek.com, some processors do not offer virtual terminals; in addition, some processors do not support processing through online e-commerce shopping carts. For this reason, business owners should ask about the availability of electronic payments before setting up a processing agreement.
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