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
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Most services will accept you even if you
have bad credit. The services can only approve you for Master Card or Visa. Then
they will send your application to American Express and Discover which will then
determine based on their criteria, whether they will accept you or not. American
Express and Discover will set their own rates not the merchant service.
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
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.
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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