If your business needs to accept a credit or debit card, then you need a merchant account. Merchant accounts are a type of business bank account that allows businesses to receive card payments through a website or point of sales (POS) directly to the business account. The merchant takes care of the financial processing for the business. Merchant accounts are behind the proliferation of online businesses. While they can be valuable to most businesses, they are more suited to some than others, read more on https://thesoutherninstitute.com/cbd-oil-merchant-account/.
What types of merchant accounts are there?
If you have decided to get a merchant account for your business, you may want to know your options. There are two types of merchant accounts, the traditional independent sales organization(lSO) and the new payment aggregators. Payment aggregators represent small businesses that may not be eligible for direct merchant accounts or ISO but they offer lesser control and higher fees.
Types of businesses that need merchant accounts:
Merchant account’s application process is thorough and can be time intensive, thus, knowing if it will be worth it for your business is very important.
The types of businesses that need a merchant account are discussed below:
1. E-commerce websites: The popularity of e-commerce websites continues to soar because they are easier to use and makes shopping more convenient for consumers. E-commerce websites survive on online payments majority of which are card-based. So if your business runs on any e-commerce model, it cannot thrive without you getting a merchant account or finding a way to accept card payments. You need to have your website running before you can get a functional merchant account.
2. Business with Financial history or Guarantees: New businesses find it harder to get a merchant account because they don’t have the financial history with which their risks can be determined. Some service providers may consider personal guarantees in place of financial history for new businesses and startups. There are merchant account companies that accept high-risk businesses but they usually come with very high fees which may eat deep into your bottom line, so a merchant account may not be worth it. If it is necessary for you to get a merchant account, then payment aggregators which offer sub-merchant accounts and represents smaller merchants may be a better option.
3. Businesses with high transaction volumes: Merchant accounts make the processing of large volume of transactions easier on your business operation and make the shopping experience of your customers pleasant. In addition, you get protected from losses due to bad checks and cash handling.
4. Businesses that need automated payments: Businesses that need to integrate automatic and recurring payments as part of their models will require a merchant account. Merchant account providers offer many types of accounts so your choice will depend on your business model. The right merchant account service can help you increase sales by removing payment hassles and barriers for your customers.
To successfully operate a modern business whether online, over the phone or in brick and mortar, you must make the method of payment easy for your customers. Due to the highly competitive nature of most businesses, you will lose sales to your competitors if you can’t process cards. Since a cashless lifestyle is nearly ubiquitous among consumers, getting a merchant account can make a big difference to your business’ growth. Even though the process of acquiring a merchant account is laborious, the long-term benefits for your business can be substantial.