What You Need To Know About Credit Card Processing Services for Merchant Accounts

Finance is the elixir of life for businesses. It is the corner stone in the foundation of new enterprises, it allows multiple opportunities for growth, it favors expansion plans and it shields businesses from unforeseen, unfortunate circumstances. Money, therefore, should be managed well. The first two steps towards managing business finances are: 1. Establishing a … Continue reading “What You Need To Know About Credit Card Processing Services for Merchant Accounts”

Finance is the elixir of life for businesses. It is the corner stone in the foundation of new enterprises, it allows multiple opportunities for growth, it favors expansion plans and it shields businesses from unforeseen, unfortunate circumstances. Money, therefore, should be managed well.

The first two steps towards managing business finances are:

1. Establishing a merchant account
2. Implementing a merchant processing agreement

Both these steps are prerequisites to get started with credit and debit card processing for your business. And, in today’s day and age, where people do not carry bundles of cash with them and where checks keep getting obsolete by the day, accepting card payments determines how advanced your business is.

What is a Merchant Account?

A merchant account is specialized to accommodate a merchant’s business needs by allowing him / her to accept debit cards, credit cards, gift cards and other modes of electronic payment made by customers for the merchant’s goods and / or services.

A merchant account involves 4 key players:

• The merchant
• The merchant’s financial institution in which he holds an account
• The customer
• The customer’s card issuer

So, when a customer buys a merchant’s goods and / or services by paying for it through an electronic medium (credit, debit or gift card) issued to him by his banking service, the transaction is passed on to the merchant’s financial institution for approval. Once the transaction is approved by the financial institution in which the merchant holds an account, the amount gets credited to his / her account.

Who is the Payment Processor?

The payment processor, the vital link in the merchant account circle, is the financial institution in which the merchant holds an account. A card processing company is usually a third party appointed by the merchant himself to manage credit card, debit card and gift card transactions. The merchant processing company or the payment processor oversees the transaction of fund removal from the credit cardholder’s account and fund deposition in the merchant account.

Why Should You Hire a Credit Card Processing Service?

Credit card processing services offer merchants a bunch of value added benefits for their merchant accounts. Choosing a reputed and experienced credit card processing service provider can be very beneficial to your business enterprise. Listed below are some of the benefits you can avail of upon hiring a card processing service.

• Merchant processing companies offer packages depending on the merchant’s business size and industry.
• The merchant need not be physically present to oversee any transaction as the credit card processing company handles the process.
• Hiring a card processing service helps you keep pace with the ever-changing payment industry.
• Accepting all types of electronic payments, such as mobile payments and online payments, is made possible.
• Frauds can be reduced due to the dismissal of bad checks and counterfeit notes.
• Merchant processing companies make tech support available 24 / 7.

The biggest boon of hiring a credit card processing company to manage business transactions is the freedom it allows you to focus completely on expanding your business.

High Volume Merchant Account – Is It Worth To Have One?

In our world today where internet is highly popular, a credit card processing is a must for business owners who want to stay in the market and stay competitive. Global merchant account is essential and it can be said that without this one can’t thrive in e-commerce. Unfortunately there are businesses that are categorized to be high risks. This is due to several reasons like fraud, high sales volume, and charge backs. High risk businesses may find it hard to avail of merchant account. Aside from increase in profits, having a global merchant account would make it easier for customers.

There are businesses that are anticipating high volumes of sales. For this reason, it is hard to apply for credit card processing system. It can be said that credit card processors are hoping that merchants can have large amount of credit card transactions because they can get commission from the sales. Although this is the case, they are hesitant to approve a business owner who anticipates large volume of orders per month. The underlying reason for this is that they are foreseeing charge backs and a merchant may not have the money to cover this problem. If one business doesn’t have any history to show regarding their credit card processing, it is most likely due to charge backs that are experienced by this kind of venture.

This is also true for internet business because of the big possibility of fraud transactions. E-commerce business is said to be high risk especially if they receive high volume of sales. In contrast, if one opens a retail business in traditional brick and mortar setting would be favorable to some providers. If an internet merchant has a good credit history, business owners can surely get an approval for credit card processing. They are said to be credit worthy so they are given a chance to avail of merchant account. However take note that if they receive high volume of sales, this could pose a problem.

High volume merchant account that receives about $50,000 of monthly sales can be seen as high risks. Banks and providers need an assurance that the owner can pay for charge back fees. They would also investigate on how much money they have on their bank account. If the amounts are acceptable, chances are the high volume account will be given. It can be said that those with an established business have a high chance of acquiring this kind of account. Even if they receive higher volumes but they don’t have any charge backs, they are perfect for getting high volume merchant account.

Of course there are some setbacks for gaining approval. One is the fact that credit processing provider can imposed a reserve funds that they control. This covers charges and other expenses. The money will be transferred to merchant’s bank account after a few months. There are some business owners who don’t like this idea. This can definitely affect their cash flow. Although this is the case, this is the only ways to have a merchant account. In the long run, having a credit card processing is worth it.

The good news is there are quite a number of credit card companies that you can choose from that offer this kind of service. If your business receives high volume of credit card transactions, there are vendors that are willing to accept the risk. They also understand the background of business. One can even find a provider that offer a cheap rate for high risk merchant account. This is definitely a win-win situation for the merchant and the merchant account provider.

Small Business Loans For Merchants

Being a small business owner can be a wonderful thing. You can set your own hours, possibly even work from home and you get to spend your days doing something that is important to you.

Whether you own a consulting firm, an internet-based business, or any other type of small business, the fact is, you are your own boss, and if your business is your passion, you get to wake up every morning and do what it is you love. But you may not be aware of the fact that if you own a merchant business, a business that sales products and/or services, you have even more of an advantage.

We all know that is very important for any business owner to have readily available funds. Readily available funds make all types of business endeavors possible, endeavors that can vary from business owner to business owner. But as a merchant business owner, you are eligible to receive a special type of small business loan, something called a merchant cash advance, that is formulated especially to meet the needs of small business owners who sale products and/or services.

When a merchant business owner receives a merchant cash advance, he/she is actually selling his/her business’s future credit card receivables. Lenders can provide merchant cash advances based on the amount in monthly credit card sales that a particular business processes. Therefore, if a business processes at least $2,500 per month in credit card sales, that business is most likely eligible to receive a merchant cash advance. Usually, the advance can be up to 30 percent more than the amount of the business’s monthly credit card transactions.

The repayment is also done via the business’s credit card sales. When customers make purchases with their credit cards, a small percentage of that sale goes toward the merchant cash advance repayment.

This process eliminates the need for borrowers to make fixed monthly payments, and the process takes place until the advance has reached complete repayment.

When you partake in this type of business financing, it does not matter how quickly or how slowly the advance is repaid. There are never any interest fees, and there are never any penalties, making this source of business financing excellent for owners of retail and service-oriented businesses.

As a person who owns a business providing the products and services that consumers need and want, you deserve an easy way to finance your business. A merchant cash advance can be that easy method of business financing.