The Advantages Of Using A Merchant Account
A merchant account is a type of account that the credit card companies give to businesses. It is specifically for the purpose of accepting credit card transactions, processing them, and then paying out the money collected to their bank accounts.
If you're familiar with how banks work, then you understand that when anyone goes to deposit their paycheck into their bank account, they are essentially depositing money from one account into another. In this case, from your personal checking or savings account and into your business checking or savings account.
Merchant accounts are essentially the same thing, but for credit card transactions.
Why Should I Use A Merchant Account?
I would like to start off by stating that many businesses could and probably should use a merchant account without needing any special justification or reasoning behind it. However, as I write this article, there is an industry-wide issue regarding the acceptance of credit card payments. By choosing to accept credit card payments in one form or another, you are not only making the business more efficient at processing payments, but you are also increasing your chances of earning a commission on each transaction.
However, many merchants do not accept credit card payments because they are fearful of the high fees associated with accepting credit cards. This is a valid reason for some businesses, but in my opinion, the protection and processing benefits far outweigh these fees in most situations. As the owner of a merchant services company that specializes in helping small businesses generate more credit card sales, I will try to shed some light on why you should consider using or moving to a merchant account as soon as possible.
Merchant Accounts Are Cheaper Than You Think
Let's face it. When people think about merchant accounts, they tend to think about how much they will pay per transaction that is submitted through their account.
This is the price that the business has to pay each time they accept a credit card payment. But, what most people don't understand is that there are many hidden costs involved when accepting credit card payments.
The first one I will address is the "cost" of processing credit card transactions. The fee you pay for this service includes not only a percentage of your total sales amount, but also up to 1% of whatever you pay out to your customers in cash, which is commonly referred to as "interchange fees." Credit cards come with an interchange rate that is typically somewhere around 2%, but this fee can range anywhere from 0.8% - 4%.
This fee is only one of the many hidden charges that you will find with a merchant account. Another charge you will find is for the data processing and registration fees. The merchant account company that you choose will charge you between $0.01 to $0.05 per transaction, depending on the size of your business and average sales amount.
Another hidden cost is the cost of preparing and classifying your transactions for reporting purposes. This also varies by business and its sales volume, but typically ranges from $0.01 - $0.04 per transaction depending on what report you receive from them (they may also require that you purchase a report).
But, guess what? You will not find these fees when you purchase a merchant account service. The reason for this is that the Credit Card Associations (Visa, MasterCard and American Express) don't allow the merchant account companies to advertise these fees and/or get into detail about them. This is because the Credit Card Associations want all merchants to feel like they are paying the same price for services; whether they are charging $1 or $1,000. Merchants with high sales volume will be paying more per transaction in fees than those that charge small amounts, but this difference is usually very small.
If you are just starting out in your business and are not yet generating enough sales to justify the cost of a merchant account, then you should also consider this fact when deciding whether or not to use one. As your business grows and begins making more sales, it will be worth it for you to take the time and money needed to sign up for a merchant account. You will also find that once your business is ready for credit card processing, the fees associated with accepting credit card payments tend to decrease as well. That's because as your business grows and processes more transactions, the Credit Card Associations will lower their interchange rates for those transactions.
Dream Merchant Services
Credit card processors are constantly changing and updating their "interchange" rates, and this is another reason why it is important to sign up for a merchant account any time you plan on processing credit card transactions.
At Dream Merchant Services, we try to give you the freedom to create your own merchant account package so that you can find something that best suits your business needs. Our site features some of the highest quality merchant accounts in the industry at prices lower than anyone else's. We even offer a "no-fee" monthly maintenance program so that you can pay as little as $10 per month for service.
As you can see, using a merchant account does not mean that you are stuck with high fees. Despite what some people might tell you, there is a lot of freedom available in the merchant services industry. You should be aware that many different companies offer these services in different ways. It is your responsibility to learn all that you can about them to make sure that the one you choose will work for your business.
Our company's purpose is to help small businesses take control of their financial situations and reach their goals by making efficient use of their time and money. We do this by applying sound business practices and systems that suit our customers' needs. This helps them accomplish more with less effort.
If you are interested in learning more about how we can help your business, please visit us at http://www.dreammerchantservices.com/ or call us at 888-690-7963 and we will be glad to answer any questions you might have.
For more information regarding merchant services, please visit http://www.dreammerchantservices.com/articles/how-to-choose-the-right-credit-card-processor/.
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Conclusion
In conclusion, we have shown you that the fees associated with merchant account services are far from what people tend to believe. The fees are actually much less than you might think and benefit you in the long run by giving you more money to invest in your business. You will find that your business will be able to handle much larger transactions with this type of service, which is where the profits will be made.
We hope that after reading this article you will feel confident about taking advantage of a merchant account, as doing so is one of the best ways a small business can reach its financial goals.