Help Your Web-Based Business Thrive With An Internet Merchant Account

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There are a great many advantages to owning a web-based business. Arguably the most attractive aspect of these enterprises is that they offer individuals or small groups of people an opportunity to have successful careers without having to be employed by a larger company. Many of these types of businesses can be started with a minimum of capital and operated without a great deal of inventory. And web businesses tend to be powerful enough to fill a marketplace need, yet nimble enough to react quickly to market changes.

In order for a web business to be successful, it must have a steady, reliable method of generating revenue. But if the business sells its goods or services online, it will likely receive orders from people whom they do not know. These customers may not be willing to write a check for their merchandise and mail it to an address - and the business may not appreciate the lag time between orders and payments. The solution to this problem is obvious: web-based businesses need to obtain an online merchant services account in order to be able to process credit card payments over the Internet.

Such an account will allow customers to select what they want to purchase and then type their credit card data into a specialized form. Many web-based businesses utilize a "shopping cart" system of e-commerce, which lets customers buy multiple items and even save their credit card information for faster transactions in the future. Either way, the merchant services provider authenticates the credit cards and completes the purchases, taking money from the customers' accounts and transferring the funds to the account of the Web-based business.

That's why every merchant account requires a business to open a checking or savings account at a local bank. These accounts act as the final destinations for the funds collected by the merchant services providers for the businesses. In addition, the Web-based business must establish a relationship with a processing bank (which may or may not be the same bank where the business keeps its accounts) that oversees the merchant account. Finally, the business must enter into an arrangement with a third party that performs the actual processing tasks when customers pay with credit cards.

The good news for Web-based businesses is that there is a wide variety of merchant services provider choices available today. But how does a business owner select the right merchant account for his or her needs? Here are a few ways to differentiate between merchant services providers.

Cost

As with most products and services, cost is a key determinant among merchant account options. The way that a business owner gauges bottom line costs is to examine certain factors. First, the periodic rate dictates what percentage of each transaction will go to the merchant services provider. This rate generally ranges anywhere from 1% to 5%. Next, the transaction fee is the amount of money that will be assessed each time a customer submits a credit card payment.

This fee can run anywhere from a few pennies up to almost a dollar. Finally, the business owner must look into any additional fees which are levied by the merchant services provider. These may be monthly usage fees, minimum revenue fees or penalties for chargebacks (when a customer disputes a credit card transaction on his or her statement after the purchase has been made).

Security

Because of the potential for fraud and identity theft, it is vital that business owners protect the sensitive data submitted by customers when purchases are made. If a customer believes that his or her credit card number or personal information will be compromised during a transaction, he or she will not patronize the Web-based business. So when searching for a merchant services provider, make sure that their security protocols meet current industry standards and that they clearly display all relevant security information on the screen so customers can see it when they pay for their purchases.

Service and Support

Though merchant accounts generally run smoothly, there are occasions when business owners will need to contact the merchant services provider for help. Whether it's because the processing system goes down or the business owner has a question about the terms of the merchant account arrangement, the merchant services provider should be accessible 24 hours a day, 7 days a week to handle any type of issue which may arise. It may be a good idea for a business owner to seek out reviews or testimonials in an effort to collect more information about a given merchant services provider's level of customer service.

Software

Finally, the business owner should inspect the software that is offered by the merchant services provider to its clients. The basic software which performs the processing functions and connects the processors with the businesses should be easy to understand and operate and must be reliable and dependable.

In addition, many merchant services providers offer bookkeeping and data analysis software that is designed to help business owners monitor, track and evaluate their sales. If these programs are relevant and useful, they can assist the business owner in identifying trends, balancing books and tweaking product offerings to maximize revenues.

It is important to remember that selecting a merchant account is one of the most important decisions that the owner of a web-based business will make. So business owners should shop around and examine several merchant services providers before selecting one for their business. A seamless, cost-effective merchant account can help Web-based business owners become successful - but a merchant services provider that is expensive or unreliable can have devastating consequences on the health of the business.

 Alberto Moran is a freelance writer who writes about a range of topics including choosing an internet merchant account.

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