With the right product or service, even the little guy can take on his competitors and win. But in order to compete against the big guys, the small business owner needs to be able to offer customers the same conveniences other merchants are offering. One of the biggest conveniences you can offer your customers? Accepting credit card payments. And with the development of merchant accounts, that step is easier than ever.
As a business owner, you can establish a merchant account through a bank, credit card company or other payment processor. There are three types of merchant accounts to consider:
Retail merchant accounts charge the lowest transaction fees, but are often restrictive. If youre a retail merchant, you will pay a high percentage of your credit card sales and the card must be presented and swiped through a credit card terminal. These are best for bricks-and-mortar operations like a hotel, restaurant or grocery store. They are not designed to process payments through the mail or online.
MOTO merchant accounts which stand for Mail Order – Telephone Order accounts are used by merchants who sell their goods through the mail or over the phone. The merchant enters the customers credit card payment information into a terminal installed on a personal computer or a Web browser on a payment service providers Web site. MOTO accounts charge a higher transaction rate than those of a retail merchant account.
Internet merchant accounts work similarly to MOTO accounts, but are used, obviously, by those with an online business. The merchant uses a virtual terminal or payment service gateway to process the credit card order. These payment service gateways are part of many business Web hosting packages.
As a small business owner, you need to explore which merchant account is right for your business and find the company that is the right fit. Look at the fees you will be charged on transactions, ask questions of the company and ask others in your line of work which account they chose. You will be paying money to use the service, so make sure it fits your needs.
Some small business owners may still be struggling with why they have to accept credit cards. After all, they must pay a processing fee every time a customer presents plastic for payment. Here are five big advantages for business owners who accept credit cards:
1.In the long run, you will make more money by accepting credit card payments than you will pay in processing fees. Studies confirm that when people can pay with a credit card, their orders will be larger than if they paid with cash. One study by renowned accounting firm PricewaterhouseCoopers estimates that the average credit card order is up to three times higher than orders paid for with cash or by check. Customers online and in store fronts want to be able to pay with a credit card and they will reward your coffers for the privilege.
2.Merchants and customers will experience real-time processing. Transactions are completed automatically and instantly. If time is important to your business, this can be a real boon. The transaction is done and the product and service (or the receipt for product or service) is delivered within minutes. If, however, your business involves offline sales meaning you do not deliver product or services over the Internet you may prefer deferred processing. This allows you to review orders for accuracy before charging the credit card and shipping. And if your online system goes down, a deferred system will not hold up sales because the customer wasnt online waiting for confirmation.
3.Credit cards are not just a convenience for customers. They are also a convenience for the merchant who can technically stay open for business 24 hours a day, seven days a week. If you operate your business out of California, a client on the East Coast does not need to wait three hours for you to wake up in order to place the order. Its ordered and paid for before you even got out of bed.
4.Credit card processing can mean fewer trips to the bank for deposits or to resolve bounced checks. You no longer have to wait to see if the check will clear because your payment is usually guaranteed by the credit card company.
5.Enlarge your customer base by adding an online component to your business one that receives payments through credit cards. Even if yours is a local shop, you ought to have an online presence. With the right tag words, your site may be the first one to pop up with the merchandise sought by someone across the country. That customer does not have to come to your store to pick up and pay for the product and you, the merchant, have just enlarged your customer base.