5 Important Questions Related To Merchant Services
Every business needs some form of payment processing system. Understanding the benefits of merchant services and how to select the right type of account, impacts the customers, sales revenue and profits of a business. Keeping this approach in mind, here are the 5 crucial questions related to merchant services along with the secret rules about these customized accounts.
1. What are merchant services?
These are the special services that allow business owners to accept credit card payments from their customers. Every merchant is connected to a credit card processor that coordinates with customer's bank and facilitates the payment processing into the merchant's account.
2. Who offers these services?
Specialized companies known as merchant service providers offer these services. Besides this, financial institutions are also a source for setting up the account.
3. Which type of company is apt for a small business?
This depends on the type of business. For instance, a small scale business owner may be rejected from a bank, as their business is not that established and successful. Independent sales organizations and merchant service providers are more flexible. While one may prefer a credit card processor with low rates, another may be more comfortable with their local bank.
4. What is required to begin payment processing online?
To begin, you need the following:
• Secure Server with Certification: When a customer enters his/her card information, it is sent in unencrypted text form to the server that hosts the website. To prevent data interception, it is recommended to use SSL encryption that ensures no illegal decoding.
• Order Form: Customers need a place to enter banking and personal information. This form should be there on the secure server.
• Gateway: Gateway is a sort of channel that allows authorization, processing and management of the services. It is that mechanism that transfers vital detailed about the customer to the processor so a business gets paid.
• Shopping Cart: It is that software that allows a small business to own an e-commerce store where purchases get calculated for them on its own. It is important to ensure that the gateway is compatible with the shopping cart.
• Merchant Service Account: Though one may have a secure server with certification, a shopping cart, an order form and a gateway, real-time processing is impossible without establishing a merchant account. This is because this account gives access to a processor who is able to authorize, capture and settle credit card transactions.
5. What are some other ways of accepting credit card payments?
Outsourcing merchant service to a third party is one method. Here, a third party collects the data of the customers and complete all the formalities to process payments for the small business.
Another good way is deferred payment processing. In this method, the customer enters all the data, which is received manually. The data does not go through the gateway. One advantage of this type of processing is the ability inspecting all the orders and correcting them. However, it can be time taking, if there are hundreds of orders in a single day.
Finalizing the best and profitable merchant service is overwhelming. Hence, consider the options and make the decision wisely keeping in mind the demand of your customers and need of your business.