Merchant Accounts
What is a merchant account?
A merchant account is an
agreement with a merchant account provider,
sometimes called a merchant service provider,
required to conduct credit card-based transactions.
With a merchant account, the merchant agrees
to honor certain obligations and the merchant
account provider agrees to coordinate the transfer
of monetary funds through the financial process.
Merchant accounts can be obtained from merchant
account providers like banks, financial institutions,
processing gateways or from independent service
organizations.
There are several types of
merchant accounts, those for use in "brick &
mortar" retail establishments, those for use
in mail and phone order businesses, and those
for use with Internet storefronts. The terms
and fees vary widely, both among and within
the types. Generally speaking, the fees grow
larger in accordance with the perceived level
of fraud risk - in other words, your bank may
charge less for a retail POS merchant account,
where shoppers present their credit cards to
you in person, vs. an Internet merchant account,
where you have no personal interaction with
the shopper.
Do I really need an Internet merchant account?
While not everyone needs
an Internet merchant account, there are many
benefits to having one. First and foremost,
an Internet merchant account will enable you
to accept one of the most popular methods of
payment for e-commerce transactions, credit
card. Multiple payment options make it easier
for your customers to complete an order.
You can still use ProStores
even if you choose not to accept credit cards.
ProStores can accept many other means of payment,
including electronic checks, traditional paper
checks and money orders. You can also leverage
the integrated services offered by PayPal. PayPal
will allow you to accept credit cards from your
customers without requiring a merchant to have
an Internet merchant account. ProStores Pro
even includes options for accepting COD, certified
checks, department orders and purchase orders.
How much does a merchant account cost?
Merchant accounts typically
require costs for the processing software and
for each transaction. Rates, account fees and
transaction fees vary widely, and may include
application, set-up and monthly fees, discount
rate (percentage of each transaction, typically
2-3%), flat fee per transaction, and even chargeback
fees in instances of consumer-disputed charges.
Some of these charges are avoidable, so do your
research carefully, evaluate all of your options
and be cautious of hidden fees.
Can I use my existing merchant account?
If you already have an Internet
merchant account, you can easily transfer it
over. If you want to have real-time credit card
processing with your current merchant account,
you should be able to leverage it if it is compatible
with one of the payment processors already integrated
with ProStores. View
a list of the currently integrated payment processors.
Check with your merchant account provider regarding
conversion and compatibility issues.
If your existing merchant
account is not an Internet merchant account,
you may or may not be able to use the account
to complete online credit card transactions
through ProStores. Please check your merchant
account Terms of Service agreement carefully
to determine whether you can integrate the account
with your online store.
What if I don't have a merchant account yet?
No problem! Many of our
reseller partners offer merchant account services
too. Some ProStores partners even offer merchant
account application built into the ProStores
application that will allow you to apply online.
Upon approval, your merchant account will be
automatically generated.
What should a small business owner consider
in establishing a merchant account?
Research your options, as
they are numerous. Consider your anticipated
number of transactions and the dollar value
of those transactions when comparing your options.
Evaluate all of the terms of an agreement, not
just the discount rate. Scalability should also
be an important consideration. You may not need
real-time credit card processing to start. But,
as your business grows, it may become a necessity.
Make certain that the merchant account supports
the real-time processing services offered by
one of the payment processors/gateways already
integrated with ProStores. View
a list of the currently integrated payment processors.
When the time comes, you want to have the ease
and freedom to leverage advance functionality
without having to establish new merchant services
accounts.
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