Choosing the right merchant account provider for your e-commerce website and online store is crucial to maximizing your flexibility and options and minimizing expenses and fees.
Why Is It So Important To Choose The Right Merchant Account?
One of the cornerstones of e-commerce is payment processing. It is practically impossible for online businesses to safely and reliably accept cash, which means that processing payments by credit and debit cards, electronic checks, and third-party payment services like PayPal and Google Wallet is required for almost all online transactions. It therefore is imperative that e-commerce businesses and online merchants choose the right payment processing options. For businesses and merchants that solely rely on third-party marketplaces such as eBay, payment processing is usually an included service that is handled by the marketplace. However, e-commerce businesses and merchants that choose to utilize their own website and platform must choose their own merchant account.
Choosing the right merchant account is crucial for a number of reasons. When done correctly, an e-commerce business will enjoy minimal fees, flexible options to change or cancel the service, and adequate support resources available. A business or merchant that carelessly chooses a merchant account may find the reverse in effect – higher fees, service restrictions, long-term service contracts and poor support.
So Where Should I Start?
First, it is important to determine that you are only researching merchant accounts specifically suited to your type of business. It may sound obvious, but if you do not have brick and mortar retail locations, make sure the merchant accounts you are researching are designed strictly for websites and virtual stores, not Point Of Sale (POS) systems where cards are physically swiped. If you do have brick and mortar locations in addition to your e-commerce site, it may be beneficial to have separate merchant accounts for each type of business.
Keep Detailed Outlines
Next, create a detailed outline of your e-commerce payment processing activities. When you begin comparing payment processors, you will be asked by each processor to estimate both your monthly sales and credit card volume. In order to ensure that you are choosing the right merchant account, you should also outline the average amount of each sale and if you anticipate that your business will experience “swings” in sales volume. Each of these points will help you determine which merchant account is the best fit for your e-commerce business and which ones may charge higher fees.
Look Out For Hidden Fees
When you begin speaking to sales representatives at payment processors, keep in mind that the representative may omit or “gloss over” certain requirements or fees. It is very important to remember that a “quote” from a representative is not the same as a written agreement, a statement of fees or a contract. Be very wary of a sales representative who claims that a fee or penalty for terminating a service agreement isn’t enforced. Be especially wary of sales representatives that provide vague or dismissive responses when it comes to fees, services agreements and penalties.
Investigate All Processor Customer Service Options
In addition to fees and service agreements, it is equally important to investigate each processors customer service options. A processor that offers 24 hour live support is ideal, but if that option is not available consider processors that offer support hours that align with your business hours. Some processors, especially ones that specialize in discounted, bare-bones services, may not even offer a phone number and insist that merchants utilize email instead, usually promising that emails will be answered within a specific time frame. This is a red flag, as it demonstrates a lack of commitment after the sale and could potentially be devastating to a small business depending on timely support.