You’ve finally decided to start your own business and are getting the necessary paperwork in order, from your business license to registering your business name.
Before you have anything printed, you’ll need to figure out how you will accept payments from customers who buy your products or services.
For most small businesses, that means finding a merchant service provider with an easy sign-up process, low processing fees, and quality customer service representatives available 24/7. But which one should you choose?
Part 1. What is a Merchant Service?
A merchant service acts as a middleman between your small business and banks and credit card companies, making it possible for you to accept credit cards from customers.
The benefits of using a reputable merchant service include:
- Access to more payment options
- Lower fees
- Increased customer confidence when shopping online or in-person
However, not all services are created equal—different types of services vary in price, features, and ease of use.
Part 2. How Do They Work?
At their core, merchant accounts are a payment gateway where businesses can accept credit card payments. When a customer purchases with their credit card at your business, they will provide your business with their name, email address, and credit card information.
After that information is entered into your payment gateway, it’s relayed to your bank so you can process it. The bank then sends an authorization request over an electronic network (which is really just one extensive system) to see if funds exist in that person’s account and if they do, it approves the transaction.
Part 3. Defining Your Needs
The most crucial step in picking a merchant account is ensuring you know exactly what your business needs and what you can afford. This sounds simple, but it isn’t always as easy as it sounds.
To select a merchant service that best fits your company’s needs and budget, take time to learn about different payment processing options.
Part 3. Scrutinizing Costs and Other Fees
The cost of a merchant account is only one part of a potential deal. You may be surprised how much some banks will charge in transaction fees and other related costs. Some even charge additional set-up or annual fees on top of it all.
Before you sign anything, have a detailed list of everything that comes with your merchant account, and make sure you understand what each line item refers to and its associated costs.
You may be able to negotiate these costs if they seem too high or get them waived altogether, depending on your business’ size or average transaction amount.
Part 5: Features and Extra Perks
After you’ve read through your choices, you’ll likely notice a few appealing features. These features can include free trials, guarantees, or cost-effective pricing tiers.
Other perks like 24/7, multiple payment options, customer support, and the ability to handle all aspects of credit card payments on your behalf also matter.
Lastly: Get All the Requirements Ready and Apply
To apply for a merchant account, you need to fill in an application form and upload some documents. Then submit it online. After submitting your application, you can expect your merchant service provider’s decision within 1-2 business days (on average).
The review process takes up to 5 business days on average with large firms and up to 10 business days with mid-tier providers. Once approved, you will be notified of your approval via email.
Defining your needs, scrutinizing fees, and comparing your options upfront ensures you get the Best Merchant Services Provider.