The truth about
Merchant
account services is that getting the right one requires comparing a lot of details about services included, fee schemes, and relevant interactions with a payment gateway. Everything about a business, from the presence and type of
retail credit card processing that you use, to the primary way sales are made, to the typical business cycle, affects the decision about the best merchant account for a business. This information also affects how likely a merchant is to get approved for a merchant account, because it shows how much risk a processor will perceive – and the higher the risk the higher the cost to the merchant for accepting credit card payment will be. So for a merchant trying to make the right call, it’s important to keep all these details in mind and take a close look at how all the possible processing service provider choices relate.
In order to conceptualize the payment process before deciding on a payment processor, it helps to know who gets a cut of the initial purchase price when a customer swipes at a credit card terminal or makes a card-not-present purchase with an online retailer. Usually at least five different middle-men receive a fee. They are the card issuing bank, the card association, the acquirer, the member service provider or independent sales organization, and sometimes a sales agent.
This is one of the most middle-man intensive services a merchant uses, although each middle-man only gets a small percentage of each sale. Despite the fact that not every one of these players is part of the actual merchant account provider, each one affects a business’s bottom line as it accepts payment at credit card terminals and gets that payment processed. So different styles of businesses see different levels of cost from all these fees.
For some merchants, one of the biggest hurdles to getting approved for credit card processing is presenting a low likelihood of chargebacks. A chargeback, when a customer contacts the card issuer to get a refund, costs everyone in the payment acceptance process money. Businesses that look to have a high risk of frequent or expensive chargebacks, such as diet marketers/promoters or technology stores that offer advance sales of products online, will have to pay higher rates to specific merchant account providers that tailor to that segment of merchants. Most small to medium sized businesses and simple retailers shouldn’t have a problem with merchant account providers perceiving them as too risky, but various mistakes or personal credit history issues can influence this perception.
So when seeking a merchant account and a retail credit card processing service it’s a good idea to provide potential service providers with as much information about the business as possible. Then a merchant can compare rates and fees offered in light of how they will all affect the bottom line when viewed in conjunction with all the other cuts taken out in the credit card process. Ultimately this will allow a merchant to find a provider that is interested in tailoring a custom account to match with the specifics of that merchant’s business.