One of the most important yet delicate aspects of any business, especially in the early phases of beginning a firm, is collecting money from your clients. Setting up an online merchant account is crucial after creating a company account. Who knows why? Well, customers hardly ever carry cash or cheque books in their wallets in today's rapidly technologically developing globe. At this time, debit and credit cards are the preferred methods of payment.
What is a Merchant Account ?
Your business can take debit and credit card payments offline and online thanks to the intermediary role played by a merchant account. You can start collecting credit and debit card payments right away after a payment processing service sets up a merchant account for your company.
The funds from credit and debit card transactions are put into a merchant account, which is a bank account. The money is also transferred to your company's bank account by your merchant account provider within 3 to 5 working days. The same-day transfer of payments is an innovation from some payment solution providers.
Benefits of Merchant Account
A merchant account and payment gateway setup has the following advantages:
Accrue more cash
Your money will reach your accounts more rapidly because merchant accounts hasten the authorization of payments. Instead of individually charging each consumer and waiting up to 30 days or more for payment, sales are typically deposited within one or two business days.
Finances are managed simply
Since debit and credit cards are used for the majority of transactions, managing, counting, and keeping track of actual money is no longer necessary. For easier money management, you could decide to completely forgo cash and use a point-of-sale (POS) system for all transactions.
Better experience for the client
Having the freedom to buy and pay using the ways of their choice ensures that your clients have a hassle-free shopping experience. Because of this, customers have a better overall shopping experience, which encourages repeat business.
By integrating online card processing capabilities with your company's operations, payment gateways serve as a sort of bridge that lessens the possibility of fraud and theft. You and your clients will enjoy a safer checkout process as a result.
Types of Merchant Account
Merchant accounts come in a variety of forms to meet the various requirements of businesses. Select the account that best suits the nature of your business.
For the most affordable setup and transaction fees, retail businesses launching a retail location should use a retail merchant account. These merchant accounts are made for stationary companies who handle the majority of their transactions in-person.
If your company is mobile (for example, a florist or food truck owner), you'll need a mobile merchant account. These accounts link up with mobile payment processing devices or smartphone applications to handle credit card payments.
A merchant account for e-commerce will allow your clients to pay for your goods and services online if you provide them online. The merchant accounts used by e-commerce companies may have different terms and conditions than those used by brick-and-mortar retailers.
How to open a Merchant Account ?
Here are the some steps , that you have to follow to open a Merchant Account :-
Assemble the required paperwork
The name of your firm, your contact information, how long you've been in business, your bank account information, and financial documents are all things you'll need to supply.
Create a merchant account by applying
Once you have included all the relevant details regarding your business, it is time to submit your application. To make sure your company is financially stable, the processor could check both your personal and corporate credit histories.
The application cost for your merchant account provider may also need to be paid at this time.
Set up your account and receive approval
Before approving your application, the merchant account provider will assess how risky you are. These factors will be taken into account:
Your company's duration in operation
To determine whether you've ever defaulted on payments or declared bankruptcy, check your personal and company credit histories.
In the event that you've previously held a merchant account
Business you are in
If you conduct transactions in-person as opposed to online or over the phone, the processor will view your company as less hazardous. Online transactions can be fraudulent.
The provider of the merchant account could ask for address confirmation to reduce risk. If your application fits within the merchant account provider's low-risk category, it will be approved. Riskier applications could be accepted by the supplier, but at a costlier price.
You can take credit and debit card payments for your company with a merchant account, giving your clients another method of payment. You can also run your business online with the help of a merchant account, but cash payments are not possible there. Despite the fact that setting up a merchant account can be time-consuming and requires permission from a merchant acquiring bank, doing so can expedite operations for your company, increase the range of accepted payment methods, and increase security over traditional payment methods like cash and paper checks.