If you are thinking about starting a new business, then something you will have to think about is how you are going to accept payment from your customers.
In this day and age, credit card processing is a must for just about every business, both online and offline, which is why you might want to consider applying for a merchant account.
Before you start, there are some factors you need to keep in mind:
Merchant account charges
In order to keep expenses low in your business, you must understand the different kind of merchant account charges you could be subjected to.
Typically, you will be charged a percentage of the total amount every time you process a credit card. By doing a bit of shopping around, you can compare the different rates offered by merchant companies, so you can get the best deal possible.
Just be aware that there are some companies that offer extremely low rates to entice you into signing a long term contract. Once they have you locked in, then the rates often increase dramatically, taking a large chunk out of your profit margins.
High risk merchant accounts
If you are in an industry that is considered high risk, then you may have problems being accepted for a traditional merchant account. This is not the end of the road though, as there are now many high risk merchant accounts available to apply for.
Access to funds
Need access to your funds quickly? In this case, you want to find a merchant account company who won’t leave you waiting around for weeks on end to get access to your money.
Unfortunately, there are many stories of business owners who have had their funds held for an extended period of time. This can be a major hurdle, especially if you need to invest the money back into the company for growth.
Always check with the terms and conditions to see how long your money could be held.
When applying for a merchant account, it’s important that you are as honest as possible on your application. Many people are tempted to bend the truth to get accepted, but going down this road can lead to disaster.
Instead, always be honest about the state of your business, and disclose all of the details about your financial history. If you don’t, then once the merchant account company finds out the truth, then you will have your account closed and your funds could be frozen.Read More