What is a Merchant Account?
A Merchant Account a simple solution for vendors who want to accept credit cards for their business. A merchant account establishes a relationship between a retailer, a merchant bank and payment processor for the settlement of credit card transactions. Therefore, the merchant account is the first and most important step for a retailer for setting up their business transaction process. A merchant account will help retailers offer a variety of options to their clients other than more simple payment options like pay pal. There can be a number of fees involved in setting up and running a merchant account so it is important to understand all fees before signing up. I would suggest a merchant account company that explains the fee structure of merchant accounts and helps you to select the most cost-effective account type for your business. This way, you will not be misled by hidden costs.
Qualification and Set up
To qualify for a merchant account, retailers must meet their bank's requirements. Internet merchants usually pay higher fees than brick and mortar retailers because they require a Card Not Present Merchant Account which is more likely to be a target of fraud than traditional accounts. To be approved for an Internet merchant account you'll most likely need to provide your bank with: a business checking account, a voided check, articles of incorporation, a Website URL, trade references and a statement of your return policy.
Once approved, the retailer needs to determine the type of account they'll be opening in order to obtain necessary hardware. Retail merchants typically use a physical terminal to swipe credit cards and obtain authorization, while a mail order or telephone order business may use a virtual terminal. Some merchant account vendors supply both physical and virtual terminals as well as a shopping cart for Internet merchants simplifying what can become a complicated process.
After determining the type of terminal you need, there are just a few simple steps to get up and running.
1) Obtain a secure server with certification: When your customer enters their credit card information, it is sent in unencrypted text form to the server hosting the website. To prevent data interception use SSL encryption ensuring no unauthorized decoding can occur. This is a key step that can protect both you and your site from
2) Order Form. You'll need to create a secure order form on your server where customers can type in privacy-protected information. Spend quality time researching and developing your order form making it both efficient and user-friendly, as this will help boost both your traffic and conversions.
3) Terminal. This is the funnel which allows for the authorization, processing, and management of the merchant services. It is the mechanism transferring your customer's vital information to the processor so you can get paid. If you are looking to establish an Internet account you'll need a secure virtual terminal. Finding a company that combines all of these services is ideal and can usually save you money by bundling the services.
4) Shopping Cart: A shopping cart is software allowing your business to have an e-commerce store where purchases are automatically calculated for you. Make sure that your terminal is compatible with your shopping cart (again another reason to bundle your services).
Once you have the accomplished the above mentioned tasks, the final step is obtaining the merchant account because real-time processing cannot take place without it. The merchant account provides access to a processor able to authorize, capture, and settle credit card transactions. Again, I cannot emphasize enough the importance of shopping around for the best possible merchant account provider that will bundle many of the necessary services to get your business up and running.
Trent Williams is a Client Account Specialist at 10xMarketing. For a secure merchant account service bundled with all necessary hardware services contact Verus Card Services today.
