How Merchant Accounts Help Online Merchants

If you are a merchant who conducts business online, you need to have a merchant account. Virtually all transactions conducted online involve a credit card. Without a merchant account to back you and support you, you could easily get burned in the credit card business.

Make no mistake. Credit cards are big business. In the United States in 2003, there were just 21 billion transactions, totaling $1.4 trillion. Five years later, that number was up to 26.5 billion credit card transactions, totaling $2.1 trillion in sales. By 2009, that number was up to $2.5 trillion in business at more than 24 million locations around the world.

If you are an online merchant, you need a merchant account so you can safely and securely get your piece of that trillion-dollar pie.

For a fee, or a percentage of the sale, a merchant account will process your customers’ online payments. You may think, “The lower the rate, the more money in my bank account,” but that is not the only way to judge a system. After all, a good merchant account will do more than process your transaction.

Yes, your merchant account will process your credit card orders, as well as purchases using a debit card. But to do that, you need the best credit card processing equipment for your business. It must also be compliant with payment card industry standards. You also need to worry about technical support. If your equipment goes down, your business could too. So, no matter what business you’re in, take the time to explore merchant accounts and find one that helps build your business.rnHere are some questions to ask:

· What is the level of customer service? As an online merchant, you are open 24/7. Is your merchant account going to pick up the phone after 5 p.m.?

· Is the service up on the latest fraud detection tools needed to protect you?

· What is the level of customer service? If it’s not superior, why use that service?

· What major credit cards will you be able to accept? VISA and MasterCard? Sure. But American Express and Discover? And what about electronic checks and gift cards?

· Will the service validate your payments instantly? That is important, especially if rush shipping is requested.

· How long will it take for payments to clear and get deposited into your account? If you’re a small business, you need your money quickly.

· How will the merchant account store sensitive information? Are its data centers PCI compliant?

Although the majority of transactions will be conducted using major credit cards, there are other options that merchants ought to consider. Their clients might also be interested in using:

· PayPal. This popular service enables global commerce. It is a fast, safe way to pay and get paid online, allowing members to send money without sharing financial information.

· Gift cards. These prepaid cards are often a boon to retailers, especially the closer it gets to the end of the holiday season. Some online merchants reported 12-fold increases in the sale of gift cards between Black Friday and Christmas Eve.

· Store-branded cards. Not all online businesses are at the point they can offer store-branded cards, but it is something to consider.

By using a merchant account for your business, you are introducing advantages for your customers and for you. Consider:

· Merchant accounts offer your customers alternative payment options.

· With some options, your customers can delay payments.

· Each form of payment gives your customers different security features, such as safeguards to avoid the misuse of their payment information or keeping their identity concealed.

So how do you choose the right merchant account system? Here are some issues to consider:

· When you key in your customer’s credit card information, you will pay a higher processing rate. By using a wireless terminal to swipe the payment card, you will pay a significantly lower processing cost. If you are strictly an online merchant, this is not an option, but many merchants offer both.

· It is critical – and worth repeating – that you choose a wireless credit card processing system that is PCI compliant and offers sophisticated encryption technology. This means you will be able to accept payments with fewer worries. (PCI compliance regulates how the cardholder’s information is kept safe from theft. A credit card terminal that is PCI compliant does not retain the cardholder’s information after the merchant submits it for payment.)

As an online merchant, you are on the right track. Right now, 63 percent of shoppers in the United States shop online. As people get used to the system, that number is expected to grow to 78 percent by 2014. Put your business in the best possible position to take advantage of that business by opening a merchant account.