Friday, June 15, 2012

What are the benefits of having a merchant account?

Small business merchant accounts require a certain effort to apply for and set up and then they have a certain maintenance cost, in the form of a monthly statement fee and, in some cases, other credit card payment processing fees and charges. Moreover, merchant services credit card processing contracts are usually for two or three years (although UniBul offers month-to-month services). So it is a legitimate question to ask what benefits you get from your credit card processing service and is it worth the investment of time to set one up.

Well, the answer is that yes, it is worth it and you should consider establishing one as soon as your processing volumes grow large enough to justify it. By that I mean that there is a break even point, different for every business, beyond which the lower processing rates, associated with credit card processing accounts, fully offset the fixed monthly fees, which are absent with third party solutions. The main benefits of having your very own retail, direct marketing or PC based credit card processing are:
  • Professional image. Every type of processing capabilities, including manual credit card processing is perceived as a sign that the business is of a certain size and it is committed to providing a complete shopping service. Actually, taking into account the strict requirements that credit card processing companies demand that applicants meet, it is true that a merchant card processing account comes with a certain level of commitment.

  • Lower processing cost. The difference in processing rates that a direct merchant account provides over a third party credit card merchant processor is significant and cannot be overstated. A comparison between an eCommerce merchant account and PayPal shows that the difference can be as high as 0.8% + $0.05 per transaction for merchants that process less than $3,000 per month.

  • Control over your account. With a third party solution, your processor has a complete control over your card payment processing activity. They can hold on to your money and even freeze your account if a suspicious activity is thought to have occurred. The direct solution gives you complete control over your account. CVV and address verification fraud prevention services help you decide whether or not a transaction is legitimate.

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