You have decided to go online and sell your products. Congratulations! Selling online can be a great way for your business to grow, whether you are a brick-and-mortar store looking to expand or a new business trying out eCommerce. Before you can make sales and start making money, you will need to set up a payment processing system that allows you to take credit or debit card payments from customers. For many businesses, this will require opening an Internet merchant account.
An Internet Merchant Account allows businesses to accept online payments. An Internet Merchant Account can provide many benefits, including the ability to reach global markets, improved customer service, and increased sales. There are risks involved with this account so make sure you fully understand the pros and cons of it before making a decision.
How Does an Internet Merchant Account Work?
Let’s now learn what an Internet merchant account looks like. Your online store will ask customers to enter their credit card or debit card information when they make a purchase. After the transaction is completed, funds will be transferred from the customer’s bank into your merchant account. Within 1-2 business days, the funds will be transferred from the customer’s bank to your merchant account.
Important to remember that you will need to set up a payment gateway when setting up an Internet merchant bank account. A payment gateway software application allows businesses to process debit and credit card payments online.
You should consider all the pros and cons of an internet merchant account before you decide whether it is right for your company.
The Advantages of an Internet Merchant Account
An Internet Merchant Account has many benefits, including:
- Ability to reach a global marketplace:
An Internet Merchant Account allows you to sell products and services anywhere in the world. This allows you to increase your sales by reaching new markets.
- Improved customer service:
Customers can pay online with their credit cards. It’s convenient and quick. This will increase customer satisfaction and loyalty.
- Sales increase:
A merchant account on the Internet can increase your sales because it makes it easy for customers to shop from your site.
- Accepting multiple currencies
An Internet Merchant Account can be used to accept international payments. This will allow you to expand your business and reach a wider audience.
While there are many great benefits, there are also some drawbacks.
Disadvantages of an Internet Merchant Account
An Internet Merchant Account comes with some risks:
- Fraud:
An Internet merchant account has the disadvantage of fraud. It is much easier to commit fraud because cardholders don’t have to present their card to purchase. Merchants may be charged back, which can lead to costly and lengthy resolutions.
- Chargebacks:
A customer may request a refund from their credit card company if they are not satisfied with a purchase. This can be very costly for your company so make sure you have a return or refund policy.
- Data breaches at greater risk
An additional disadvantage to an Internet merchant account is the higher risk of data breaches. Online merchant accounts are more susceptible to hackers and other criminals trying to gain customer information. The merchant may be held responsible for financial losses suffered by customers if there is a data breach.
- It is expensive to set up and maintain.
Internet merchant accounts are expensive to establish and maintain. These accounts can be costly and may not be worthwhile for certain businesses.
An Internet merchant account is a useful tool for businesses who need to accept credit cards online, despite these drawbacks. Businesses can reduce the risk associated with these accounts by taking precautions to prevent fraud and data breaches.
An Internet Merchant Account has many advantages and risks. Before deciding whether this account is right for you, it is important to weigh all of the benefits and drawbacks.
After considering the pros and cons, you can now learn how to open an internet merchant account.
What Are the Requirements to Open an Internet Merchant Account?
You may be curious about what an Internet merchant account looks like and how it works. It is quite simple. Most cases require a valid business license and a bank account.
Once all the documentation is in order, you are ready to begin the application process with the bank or payment processor. You will be required to give basic information about your company and your expected sales volume during the application process. After your application is approved, you can accept credit and debit cards online.
Internet Merchant Account Fees
When you set up an Internet merchant account, one of the most important points to remember is that fees will apply. The fees you pay will vary depending upon the payment processor or bank that you use. However, they generally fall under one of these three categories.
Transaction fees: Customers who make purchases with their debit or credit cards will be charged transaction fees. These fees typically include a flat fee and a percentage of the total transaction amount. A common transaction fee structure would be 2.9% + $0.30 per transaction.
Monthly fees: Most banks and payment processors charge monthly fees in addition to transaction fees. The monthly fee covers the cost to maintain your account. It typically costs between $10 and $30.
Setup fees: When you open your first account, some banks or payment processors might charge a setup fee. This fee is usually around $50.
These are only some of the common fees associated with an Internet merchant account. Before you open an account, make sure you ask your bank or payment processor for details about the fees.
You now have a good understanding of Internet merchant accounts, and it is time to set one up for your company. Once you have a merchant account, you can accept credit and debit cards online. This will give your customers more payment options.
How to Get an Internet Merchant Account
An internet merchant account can be a great way for your business to go online. Customers can easily buy from you by accepting credit or debit cards. You can also offer PayPal and Google Checkout payment options with a merchant account.
You will need to locate a reliable merchant account provider before you can get started. There are many providers available, so make sure to compare their features and fees before choosing one. Once you have found the right provider, it’s time to create your account and begin processing payments.
Balanced Processing Partners can help you find the right merchant account provider and the best credit card processing system for your business. To learn more, please call at (800 354-6256 You can also email us at [email protected].