How Merchant Accounts Have Been Improving Small Businesses For Decades

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Credit cards and merchant accounts have changed the way people shop and the way companies do business. Few people remember the days without "plastic." The earliest credit cards were used back in the 1920s. Hotels and oil firms offered cards to their customers, but they were more like today's "loyalty" cards than credit cards. The first actual credit card was issued in 1946 by Diners Club. It targeted the restaurant industry and allowed customers to pay for their meals with their Diners Club card. It wasn't until 1958 that American Express and Bank of America issued credit cards as people know them today. Visa and MasterCard soon followed. Merchants trying to keep up with all of these changes turned to merchant services accounts to provide the equipment, advice and expertise needed to keep up in an ever-changing economy.

Imprinters

Before computers were running the world, businesses used manual imprinters to record a customer's credit card information. All the merchant had to do was place the credit card on the imprinted plate, lay down a carbon copy charge slip and then run the imprinter over the slip. The merchant mailed the slip to the bank and, after a few days, moneys were deposited in the merchant's account. While this system worked - and, in fact, is still used as a non-electronic back-up system - it proved time consuming. Merchants wanted quicker access to their funds. And they needed to know if the credit card would be accepted or declined before any merchandise was released.

Electronic Authorization

Next up, merchant accounts introduced electronic authorizations. This system offered quicker approval than imprinted slips, but it still took as long as five minutes for a clerk to send in the credit card number over the phone and get approval. For large sales, it was worth the wait, but for smaller sales, it often wasn't. But, by not waiting, the merchant ran the risk of handing over merchandise without knowing if the card would be accepted, allowing him get paid.

Terminals

Enter point of sale terminals in 1979. These were bulkier than what is used today, but they were based on the electronic capture of data used with today's systems. In 1979, MasterCard was the first to include the magnetic information stripe on the back of its cards. Everyone else soon followed. Each step of the way, merchant services accounts have been working to make the merchant's job easier - and simpler for the customer. That hasn't changed, and today's merchant service accounts can do far more for the business owner than accept credit cards.

Check Acceptance

For those customers who prefer to pay by paper check, a merchant services account has equipment that quickly converts a check into a secure electronic document. The result is that the merchant gets paid immediately, and the days of worrying about bouncing checks are over.

Wireless Payments

Merchant services accounts let business owners accept payments anywhere, from the great outdoors to a basement office. When you have a wireless terminal, you don't need a bricks and mortar operation to make sales. After all, some businesses are on the road. If you're an artist who travels the outdoor art show circuit, you can sell your works right from the booth at the fair. Or maybe you sell your wares at trade shows. If so, a wireless terminal lets you make sales on the spot. Stop sales from walking away with a wireless terminal.

Even some bricks and mortar shops will benefit from wireless terminals. It is perfect for the business that wants to be able to make sales anywhere inside the building. Let your customers pay for their meal at the table of the restaurant, rather than handing over their credit card to a stranger. You don't need a land-line or power source to process sales.

ATM Service

When a business runs a cash-only operation, it is convenient to have an ATM on the premises. It's also a smart business move. Customers who come in without cash withdraw the funds they need and the business makes the sale. As an added bonus, the business can charge a fee for each ATM transaction.

Cash Advance

There comes a time when most businesses could use an infusion of cash. When the merchant can't or won't turn to a bank for a loan, turn to a merchant services account instead. The merchant account will front the funds based on future credit card transactions. Of course, the approval and the amount of funds will depend on the merchant's credit card volume, but it could be as much as $250,000 within as few as 72 hours. Then, as the merchant receives credit card payments, the merchant services account is repaid with a small, fixed percent of the daily credit card receipts. Merchant services accounts have been there from the beginning, making the task of exchanging funds easier than ever. Find out how a merchant account could benefit your business.

Stephanie Washer is a freelance writer who writes about a range of topics including merchant services.

 

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