Though e-commerce has been around for some time now, website owners still face difficulties in getting merchant accounts from Merchant Services Sales Jobs and financial institutions because of the risk of credit card fraud. Fortunately, there are other internet merchant services that are more than willing to support e-commerce businesses. These specialized services have a good understanding of the complexities involved in online businesses be they low or high risk, small or large ventures.
Merchant account providers - what to look for?
There are a number of merchant account providers in the market that cater to a wide range of businesses. Before applying for a merchant account, have a look at your credit report. If there is a possibility of sprucing it up, work on it. A good credit report will get you better rates. Credit card processing services also want to see the following information published on your website:
• a clear policy on returns and refunds
• terms of use statement
• a privacy policy
• a shipping policy with details of included costs
First step: Merchant account
The first requisite of an online business is a merchant account. You can get it in two ways:
• True merchant account: This is an account a business has with a bank or other financial institution; usually preferred by large, established businesses. The business applies for a merchant account; the bank verifies the credit history of the business entity or proprietor, and the type of business (low or high risk) that will be carried out over the website; the bank approves or rejects the application on that basis. The e-commerce business must comply with the rules laid out by the bank.
• Third party processor account: This account works well for small, startup, and high risk businesses that may not get approved for merchant accounts otherwise. The e-commerce business applies to a third party processor that processes all the transactions in its own account. The business is not subject to the same level of checks - credit history, etc. - and is only bound to the rules laid down by the third party processor. A well-known third party processor is PayPal.
Second step: Shopping cart
The second step is selecting a shopping cart for your e-commerce website. You need to look for a shopping cart application that will integrate with your merchant account and payment gateway.
Third step: Compare credit card processor's rates
Invite quotes from five or more credit card processing services and compare their rates and features. The rates can vary based on the average sale amount per credit card transaction (average ticket size) and the number of transactions processed in a month. Whatever be the fees applied, they should be clearly mentioned at the start of the contract. Fees usually charged by most providers include:
• setup fee
• discount fee (percentage per transaction)
• transaction fee
• monthly minimum fee
• termination fee
• gateway fee (if not included in the solution)
• application fee (optional)
• miscellaneous fees
You should take the time to do a comprehensive comparative study of credit card processors before making your final decision. Compare services rendered, rates charged, customer service, past records, etc. Get references from associates and ask questions freely. Switching credit card processors could be a cumbersome job. Get it right the first time around.