Merchant accounts and services are growing in popularity. In fact, they’re something that all businesses now need, as online payments and credit card purchases are becoming more and more popular with customers. Your business will benefit considerably in investing in merchant services.
Types of Merchant Accounts
Before looking into the benefits, you need to know about the types of services and accounts available.
The newest type on the market is an aggregator merchant account, suitable mostly for small and medium-sized businesses. A payment provider acts as the main merchant, keeping running costs and risks to a minimum. The type of account is also known as a payment facilitator account or a payment service provider. There is often a payment limit that you can reach with aggregated accounts, encouraging you to move up when your business grows bigger.
Larger companies tend to use the independent sales organization merchant accounts. They are run by the merchant who opens the account, offering more customization and flexibility. There are setup and monthly fees involved.
Benefits of Merchant Services
While there are costs involved, these should be considered an investment. You gain in far more ways within your business by opting for a merchant account. You can accept payments in many other ways; in methods that your customers want to pay in. PayPal, credit card, and even smart payments are available through the accounts.
You lower the risk of checks bouncing, which would lead to calling up customers/clients and asking them to pay again. With people paying in secure ways online, they’re more likely to spend money with you and that increases the amount of sales you gain.
Your money management will also be improved. There’s no need to count the cash you gain or spend hours going through all your account books for tax time. The merchant accounts will create a spreadsheet that tracks your income and helps manage your finances simply. It’s easier to check on your cash flow, as well as manage any late payments and debts.
Of course, your customers gain and not just through paying in their preferred method. Merchant services give you the option to allow recurring payments, which is excellent for those with monthly retainers and subscriptions. The customers don’t have to remember a due date and you don’t need to send out email reminders for due payments. Convenience goes a long way in gaining and retaining customers or clients.
Merchant Account Fees
Yes, there are some fees involved. The amount will depend on the type of account that you set up.
If you’re a small business, you will want to keep the merchant fees small. This is especially the case when you start up. The aggregated merchant services tend to have smaller monthly fees with no set-up costs. In some cases, you can choose to either pay a set amount on a monthly basis or opt for a percentage taken from each payment made. If you’re starting out, opting for the latter will help to keep your costs down when you’re not entirely sure the amount you will gain.
The larger independent sale provider accounts will have set-up costs and monthly recurring fees. The monthly fees are usually a set amount, regardless of the amount of payments you take and the amount of money you make within your business. This helps to keep track of financing, but you need to ensure you make enough to cover the costs.
Merchant accounts open the methods of paying for your business services or products. You need to add one to your business to increase sales and customer loyalty.