The following article aims to give you some knowledge on exactly how a merchant account works and what it can do for you. It’s all very well signing up for these things, but if you don’t know the ins and outs you could be setting yourself up with the wrong payment processing company. It’s important to ask the right questions when it comes to signing a contract for a merchant account.
What is a merchant account'
A merchant account with an independent payment processor is basically an account through which all the money you take from your card terminals or other payment methods goes through before being transferred directly to your business bank account. This account processes the card transactions you take, deducts the percentage or flat rate fee per transaction, and then deposits the remainder in your bank account. It’s all done automatically and you don’t have to do anything.
Depending on your payment processing company you can usually gain access to a transactions log online or something like this that will enable you to see the transactions as they are taken and how they are processing. All merchant accounts, whether they have this feature or not, are usually very user friendly.
How much does it cost'
Again, depending on which payment processor you sign up with, it shouldn’t really cost much at all. The good merchant accounts are free to open, and this is primarily because the company you’re dealing with is quite aware that the fee they take from each transaction is enough to pay them for what they do and they don’t need to charge you much more.
However, there is usually a reasonable fee to pay to lease the card terminals you need. This is payable monthly and is the only other fee you should really be paying besides the merchant fees.
The merchant fees are what you pay on each transaction. There are two types of merchant fees: percentage and flat rate. It all depends on what sort of a business you run when it comes to these two. You’ll be able to work out which is best when you consider the type of things you sell.
How do you get one'
You simply find one that suits the way you do business and then you sign up with them. Depending on which one you choose you should be able to take your first card payments within a week. If it takes much longer than this, or you have to pay a set up charge then you’re probably looking at the wrong merchant account.