Choosing an appropriate merchant account for eCommerce business is not that simple because it should satisfy all your requirements including the fees, convenience and processing time. A number of e-Businesses are facing the difficulties in discovering the best way to accept payments for their online businesses.
As the Internet is an instant medium, it is highly required that an eCommerce website must accept credit/debit cards and online checks as methods of payment.
In order to accept credit card transactions, you basically need to setting up a merchant account with a merchant bank. As early as you set up a merchant account, an online processor can provide you with the software or gateway you need to execute.
Deciding on an appropriate merchant account is considered to be one of the most tough business decisions you make as their existence has almost doubled and are now into more than hundreds.
In prior to make a decision on a suitable choice for your business needs, you should be aware of the costs involved in setting up the account.
Key Steps To Follow
Here in the following paragraphs we are presenting you the important steps that need to be considered while taking a decision pertaining to merchant account. And most importantly, don’t hesitate to ask your hosting bank or firm about each of these items before agreeing to an account.
Application Processing and fee
Many agents or banks charge you the application processing fee, so that they can study your case as a potential customer. There are several firms who are more likely to repay this fee if your application is not accepted. As a decision maker, you should go with the firm that is cost-effective. However, it is always advisable not to pay an application fee that will not be refunded in case your application is not approved.
This particular fee in many cases requires you to do a least amount of business with a merchant bank. A majority of banks or agents require a monthly minimum of at least $20-30 in transaction fees. If the minimum fee is less than $35 is reasonable. However, you can take the decision based on the ‘added’ services of the provider, if any.
If there is a sizable minimum monthly billing necessity, then there should be no extra fee for reports or statements. However, there are still banks or agents which charge extra fee for statements to cover administrative costs. If you are calculated a statement fee, it should basically be less than $10 per each month.
Charge back attempt
In a scenario a customer is not gratified with their purchase, can’t get a refund, or is simply seeking something free, you may be challenged with a charge back attempt. Under this, the bank will return customer’s fund and debit your account for the full amount. Always make sure to ask about your bank’s charge back policy. Most banks tend to be more loyal to cardholders than merchants so protect yourself by preventing charge back fees.
The transaction fee is generally about 2-3 percent of the purchase and it is calculated on every transaction. If a product costs $50, the bank would receive $1-1.5 for their services. While charges are based on the nature of your business, estimated volume and your credit history, you should better avoid paying if the fee is > 3%.
The setup fee covers administrative activities to establish your account. In many cases there shouldn’t be any setup fee if you are charged a software fee. There is a significant amount of work completed to create merchant accounts, accordingly fees of $50-250 should be predictable.
When you decide on approaching banks or agents pertaining to merchant account, you should at all times pay attention to the following guidelines:
1.Go through the terms, conditions and estimated charges cautiously
Until and unless you get answered all the questions you have in mind, don’t take the step to sign anything. You better take sufficient time to have a clear understanding about what exactly you are going to get and how much you are paying for it.
2. Do you need a reserve account?
Normally you shouldn’t require it, however if you are a start-up online based business, have poor to marginal credit, project stumpy volumes or run a risk business, it may be needed.
3. How long before funds are available to you?
In many cases, the funds should be available within 72 hours from the time an order or transaction is processed.
The instant options
If you are still facing difficulties in choosing a suitable merchant account for your business, here are some popular options available to setup your merchant account.
PayPal: With a PayPal account you can accept credit cards on your website immediately
North American Bancard: If you are US based business, this is one of the suggested options for you. It is a full-service payment solution provider of Credit, Debit, Check Conversion and Guarantee, Checks by Phone & Net.
Click bank: The click bank services basically offer distribution of digital products and has an instant affiliate network promoting your products or services.
Choosing The Right eCommerce Hosting Solution
Ecommerce-hosting is a big choice in any business that you decide to run. Whatever you have to offer, you can do it online. But, in order to be effective in the online markets, you need to choose your Marketing strategies wisely. Having a cost-effective hosting solution is the key in eCommerce business. The following steps will help you understand on how to choose the best as well as cost-effective hosting solutions.
- The hosting firm should provide you with good quality service within your specific budget. It is very much possible to find the right choice when you do your research.
- You have to check what comes with the package. Many times, you will be purchasing a package of services that should get you up and running.
This information is for Learning purposes only. We are indeed not financial/legal mentors. It should not be considered legal or financial advice. You should consult with a financial/legal advisor or other professional to find out what may be the optimum for your individual needs.
Please do your own research.