Online Business Merchant Account Providers – Ecommerce Merchant Accounts – Retail Merchant Account

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Using an Online Business Merchant Account

Anyone who has an online business should have an online business merchant account.  A merchant account allows businesses to accept a wider variety of payments, and an online business can accept payment from credit cards, debit cards, and gift cards without having to go through a third-party service like PayPal.  With the ability to accept a wide variety of payment options, businesses gain a huge advantage over competitors who do not.  Studies have shown that sales and profits increase up to 250% or more with the help of an online business merchant account.

Online Merchant Account Basics

Generally, in order to get an online business merchant account and accept credit cards from customers as payment, the business must first be granted “merchant” status by a bank.  This usually involves an application process, and the bank can choose to deny an application if they feel the business is a high risk.

Calculating your Risks

Risk factors are calculated from a number of different places.  If the business has a high chance of failure, it will generally be denied.  The risk of chargebacks is another factor.  Chargebacks happen when a customer disputes a cost that was purchased with a credit card, and has the amount removed from his bill.  The merchant is then responsible for repayment of those funds to the bank.

Acquiring Banks

All merchant accounts have what is called an acquiring bank that issues businesses a merchant ID to handle transactions.   The Acquiring bank will then authorize or decline each customer transaction, collect any payments on the business’s behalf from customers, and then pay the money to the bank account holder.

Cost

There are always costs involved in having an online business merchant account. Usually, the bank or provider will charge a setup fee to get the account started and process the application.  Then the online merchant will have to provide computer software that captures the customer information and transmits it to the acquiring bank.  There are sometimes monthly recurring fees for having the account, and some banks or providers even charge a per-transaction fee, that is generally a small percentage of the transaction amount.

In order to find a good account and not get ripped off, merchants need to be aware of all of these factors before applying for an online business merchant account.  Know how the account works, and what your business’s risk factors are.  Find out who your acquiring bank will be, and what extra charges might get added through them.  Ask what the costs are up front, before you sign anything at all.  Never agree to terms you do not understand, and make sure to look for hidden fees and charges in the small print.  These tips will help you find the perfect account for your online business, and help your business make the most profit possible.

Steps to apply a Retail Merchant Account here.