A Merchant Account for Your Home Based Business

A merchant account is needed in most businesses today. These accounts allow your home based business to accept Visa, MasterCard, American Express and Discover. If you have an online store the customer will go from your shopping cart to a “gateway” (the secured link from your website to the credit card authorization site) which is a secured means to transfer the information to the credit card authorization service or what we call a merchant account. Rates vary based upon your credit history and number of transactions you do per month.

Of course if you don't have an online store you will not have to worry about the gateway. You will be given a credit card terminal to upload the data from your customers credit cards. Below are a list of questions that all home based business owners need to ask prospective merchant service companies.

Questions to Ask When Checking Merchant Services

• What is the rate for internet transactions?

• How long for transactions to be completed and be deposited into your account? (usually Visa and Master Card take 2 to 3 days) (American Express and Discover 3-4 days)

• What is the Gateway that they use to process payments?

• What shopping carts is the Gateway compatible with?

• When does the bank process current day transactions and what is the cut off time?

• Is there a minimum amount of monthly transactions?

• If so, what is the amount and what is the fee?

• Is there a fee for the Gateway? If so how much?

A Secret I Found to Get Your Money Faster:

If you are on the same time zone as your Merchant Account then batch (a batch is all your credit card transactions ready to send to the merchant service for processing) most of your orders right before 2:00 pm. My merchant account is in California which is Pacific Mountain Time and I am on Eastern Standard Time which is a 3 hour difference. In order to get my credit card batches posted to the bank in California that day, I will post as many of the credit card batches that I can before 5:00 pm Eastern Standard Time. This way I can get my credit card charges posted in California before that banks 2:00 pm cut off.

This is very important information which can definitely impact your cash flow. You need to receive your funds as soon as possible. Your customer is expecting shipment the following day and they don’t care that you didn’t receive your funds yet. As far as they’re concerned the credit card transaction went through on their end.

For about 3 or 4 months I didn’t know or think about the batches being posted earlier. I was told by the merchant account services that their cut off for the day was 8:00 pm their time or 11:00 pm my time.

I was literally waiting an extra day that I could have received my credit card payments in my bank.  Many banks transaction cut off time is 2:00 pm.  Check with your merchant service.

The gateway payment system for your online store should allow you to manually batch your credit card orders. By manually batching your payments you are sending them in at the time you want to. If you don’t manually batch them they usually will be batched automatically, meaning that all batches sent to the gateway will be batched and posted at a specific time of day and then will be sent to the merchant service that processes the payments.

Another way to accept online payments is PayPal. It is the quickest way to get set up and start accepting credit card payments immediately. One drawback however is that some people just want to use their credit card on the website without first signing up for PayPal. You can lose a few customers if that is your only means of receiving online payments. You may want to set up a PayPal business account as well as another merchant account. This will give your customers more flexibility when paying for your product or service.

Bottom Line

Not all merchant accounts are the same. You need to do your due diligence when checking merchant services. Each company has different fees and programs. The easier you make it for your customers to pay for their products or services the more money your home based business will make. If you own an online store statistics show that the more complicated the check out process is the more sales will be lost.

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