Thursday, March 26th, 2020
When it comes to processing customer payments, there is a lot to consider. In addition to keeping up with their preferences and needs, your business also has to ensure customers’ information stays safe and secure. To do this, you will need a merchant account.
What is a Merchant Account?
What is a merchant account? A merchant account lets you accept credit and debit cards from your customers and helps you stay competitive in many other ways. Essentially, a merchant account is a bank account that extends you, the merchant, a line of credit. This allows your business to then receive funding for credit transactions based on the trust that you will perform the services or deliver the goods.
Here is an example of how the merchant account process works:
- Your customer pays for a product or service with their credit card
- The funds are deposited into the merchant account
- They are then transferred to your business bank account (typically on a daily or weekly basis.)
The goal of a merchant account is to seamlessly facilitate the complex interactions that need to occur between your business, your customer, the credit card networks and your payment processor each transaction you accept. With the right merchant account, your business will be able to simplify the payment process for both your business and your customers.
The Challenge of Getting a Merchant Account
For many businesses, applying for and getting a merchant account is not an easy process. The business of issuing merchant accounts is highly competitive, and providers prefer to minimize the risks involved. To determine whether or not they should approve a merchant account application, they typically consider a variety of criteria:
- Business type – is there a higher or lower risk of credit card fraud or chargebacks?
- Length of time in business
- Business history – is there a history of bankruptcy?
- Personal credit history
If traditional lenders feel that your business is too risky, your merchant account application will be rejected. When merchants find themselves in this situation, many turn to alternative providers. A high-risk provider specializes in working with business types and industries that struggle to secure a merchant account.
If your business needs to find the best merchant accounts and payment processors, consider browsing the reviews and information Best Payment Providers has to offer. The team at Best Payment Providers reviews contracts, rates and fees to ensure you get the best deal.