Setting up a merchant account for your business is almost compulsory in today’s world. The world is transforming to the norm of cashless (not solid tangible money) transactions.
The process has escalated due to the covid-19 pandemic. So regardless of how small or big your company is, you have to find a reliable organization for your merchant account process service.
What is Merchant Account for Credit Card?
The merchant account for credit cards is similar to the company’s trade account. It facilitates purchase with cards (credit card or debit card) and all other electronic payments. With a merchant account, a business organization can receive and make payments.
Having a merchant account credit card service elevates the credentials of your corporation and increases the strength of the status of your corporation.
Merchant account services often impose higher charges, but the extra fees are reasonable compared to the array of services.
The Benefit of Merchant Account for Credit Card
Below are some of the key points on why should you get a merchant account for a credit card:
Increase Sales
A business that receives card payments generates more sales than the cash-only model. In small retails, merchant account service has proven to boost sale volumes.
Attract More Customers
The ‘We accept VISA’ (or any other card services) sign at the front door of small businesses will instantly impact the potential customers. It also convinces the clients’ subconscious that paying through a card process service is more secured than cash.
Efficient Money Management
Electronic transactions will eliminate the hustle of counting cash. Auditing the balance and sale amount will be unexpectedly easy for those who have not used
Avoid Bad Checks and Cash
Setting up a merchant account for credit card processing can save an organization’s time processing and eliminate the expenses for bounced checks. For start-up ventures, it can reduce a potential risk factor to 0 (zero).
Ease of Remote Payment
Having a merchant account process service, a business can easily receive online payments and expand their market out of their establishment.
Preparing VAT & Other Documents
A merchant account does more than collecting and sending payments for both in-house and remote transactions. It also separates the amount of VAT and other applicable fees or duties from the payment you receive.
The Flow of Liquidity
An organization with a merchant account credit card can easily get small loans to maintain a handsome flow of liquidity.
Your bank can provide you with more benefits based on your investment, types of venture, and other factors.
Remember: there is no limit on how well you can serve and how many advantages you can take for that. So communicate effectively with your bank manager or card service provider to get a sweet deal.
Steps to Setup a Merchant Account for Credit Card Processing
Generally, you can set up a merchant account for credit card processing in two different options. You can choose any option, but you have to formulate a formal agreement in both choices.
Choice A
Signing an agreement with a bank that works as a representative of a card processing service provider like Visa, MasterCard or American Express.
Choice B
Signing an agreement with an agent of a bank (who is also a member of a card processing company), like an independent sales organization.
Triangle Relationship of Merchant Account
Also, note that setting up a merchant account is a triangle relationship. The three parties include:
The Merchant: You and your business both are labelled as the merchant.
The Acquiring Bank or Merchant Account Provider: Refers to the organization with which you choose to sign the agreement.
The Payment Processor: It refers to the credit card processing company like Visa, MasterCard or American Express
How to Setup a Merchant Account
The procedure below is a general guideline to set up a merchant account for credit card processing, and it can slightly vary from one financial institution to another:
- Deciding on the type of merchant accounts (conventional, mobile or online) you want to set up.
- Selecting the second party (an acquiring bank or independent sales organization).
- Communicating for an agreement with your preferred service provider
- Mentioning any additional feature or service that you want to utilize as extra benefit from the account
- Do your market research and look for any better service.
- Prepare all the necessary papers and fill up the application form
- Submit the correctly filled up application along with notarised documents (if required)
- Setup merchant equipment and install the recommended software
You have to work on the details of each step to make sure you are not missing to ask your service provider for a required service or feature. In some cases, you might negotiate the cost of merchant account maintenance.
Conclusion
Setting up a merchant account for credit card processing, you can enjoy superior business processing. It does not matter how small or giant your company is. Upgrading to electronic payment is a suitable decision at present.
See more: How Much Does Outsourced Payroll Cost?
