What To Look For In A Merchant Account Provider (Selling Goods From Your Site)
|January 19, 2013||Posted by Guest Author under How To Build A Website|
So you want to sell online products from your site, then you’ll need some form of payment processing system, but what? In this guest post, Danielle Thomas advises us on how to find the most secure and reputable services out there.
Which Merchant Account Provider Should You Choose?
As an online business owner, you will likely require the services of a merchant account provider or payment processor so that customers can pay for their purchase via your website.
Unfortunately, with billions of dollars in transactions happening every day online and with a relative lack of regulation in the merchant account and credit card processing industry, business owners can be the target of shady businesses that seek to exploit by slapping them with huge, hidden fees and other illegitimate business practices.
The good news is that with a fair amount of due diligence, merchants can ensure they are working with a legitimate service provider and largely eliminate many of the risks that can arise when dealing with companies that engage in shady tactics.
Who’s Out There?
There are literally hundreds of credit card processing companies out there. Paypal is probably the most popular household name and is global. Although Paypal has a rock solid reputation, the problem with using Paypal is that customers will be redirected to Paypal’s website when they purchase a product or service through your website. However, some business owners prefer customers to remain on their website throughout the entire purchasing experience. Some trusted U.S. merchant processors including Chase Paymentech Solutions and Merchant Warehouse offer greater integration options. They do require a shopping cart, but in the end your customers remain on your site. Also, they give potential clients who don’t have a PayPal account the added option of paying by credit card. That could mean extra sales for you!
Following is further guidance on choosing the best merchant processor for your needs.
This is a great starting point in any due diligence process. If you start with more granular analysis, you may be wasting your time if you check online reviews at the end of your process and discover that every customer has nothing but negative remarks. Start with a simple Google search for the firm in question and look at customer reviews. Remember that companies will often pay to have positive reviews posted, so it is essential to comb through and make sure that the great majority of reviews are positive. Ideally, over 80% of online reviews should be positive. The reality is that the solid companies out there have this type of feedback environment, so why not stay with the best?
This is where the majority of merchants get it wrong. Too many business owners agree to contracts that they simply do not understand. It is important to read every single line in your contract to ensure that you fully understand all fees that will be assessed to your account.
The only fee that you will absolutely have to pay is the per-transaction fee the credit card processor charges you. This will typically range between 1-2%.
Here is a list of fees that you should not agree to pay:
- Monthly Statement Fee
- Application/Set Fee
- Internet Gateway Fee
- Equipment Fee
- Cancellation/Termination Fee
- Hidden/Junk Fees
- Annual Fee
Many unscrupulous companies will seek to extract fees from unknowing clients by charging the above listed fees. Reputable companies will not charge these fees.
Here is a list of fees that may/may not be charged
- International payment fee
- Transaction fees
- ACH/Daily Batch Fee
- Monthly Minimum Fee
- Monthly Maximum Fee
- Surcharge Fee
- Chargeback Fee
These fees may or may not be charged. Oftentimes it depends on what you need. For example, you may be able to negotiate a lower transaction fee by agreeing to a monthly minimum fee. These fees are common but often vary from firm to firm.
During the due diligence process make sure to call the merchant provider several times at various times throughout the day to make sure you can get someone helpful on the line. Remember, that once you choose a merchant provider, the only time you will contact them, most likely, is when you have a problem. The customer service should be very helpful and easily accessible around the clock.
Danielle Thomas is a graduate from Marshall School of Business at the University of Southern California, now working as a freelance writer, entrepreneur and researcher. She covers a wide range of topics for www.processingfinder.com with a particular interest in technology, the Internet, and the emerging business systems of the 21st century.