 Ecommerce Merchant Accounts: Guidelines and Considerations
Setting up An Ecommerce Merchant Account?
Consider this...
With an ecommerce merchant account, your business will be able to accept credit cards for online transactions. Customers can easily make purchases at any time - you'll be open for business 24/7 - and your business will be smack in the middle of the global marketplace, a sure way to significantly increase sales. When transactions are posted on your online
merchant account, payments are electronically deposited into your business bank checking account.
Statistically, website conversion will be higher if an online business accepts credit cards on their website. Following are some basic guidelines and considerations when setting up an ecommerce merchant account:
How an Ecommerce Merchant Account Works
With an ecommerce merchant account, you'll be able to accept payments from most major credit cards, MasterCard, Visa, American Express, Discover, Diners Club, etc. Some online merchant accounts will also allow you to accept debit cards. When an online customer pays with a credit card, your ecommerce merchant account processor authorizes and completes the transaction in real time. The funds are then transferred from the customer's credit card and electronically deposited into your "regular" business bank checking account. These funds are generally available within 2-3 business days.
Do I need special equipment to process credit card sales?
In a brick-and-mortar store, a merchant uses a special PCI
Compliant credit card equipment terminal that can read the magnetic strips on the back of customers' credit cards to gather customer information and print out a receipt. If you're working as an online merchant, all you need in order to process ecommerce orders is a computer with Internet access!
Requirements for opening an ecommerce online merchant account
To set up an ecommerce merchant account, you'll have to supply basic information to the merchant account processor about your business - company name, principle ID, address, phone, website address, etc. You'll also need to provide information about your business bank checking account and a copy of your selling permit, articles of incorporation or other business license. Other specific conditions for setting up an online merchant account may vary from one processor to another and might include estimated monthly sales volume and estimated average credit card transaction. When filling out an online application for an ecommerce merchant account, always make sure that the site offers security protection that ensures your information.
Fees and charges
Startup costs for an online merchant account might include an application fee, but this is sometimes waived by the credit card processor and you should always inquire to see if this is a possibility. Fees might also be incurred for a payment gateway - a third-party intermediary between the merchant's shopping cart and the online merchant account that detects any potential fraud. Payment gateways can be included as part of an ecommerce merchant account package, so research a number of ecommerce merchant account processors to find one that offers the most benefits, the best rates and is the best fit for your business. Once your ecommerce merchant account has been set up, there will be a monthly charge and percentage-based fees for each transaction.
Most all online merchants adjust their listed online prices to cover the nominal merchant account fees.
Is your ecommerce business considered high risk?
Some ecommerce businesses are considered "high risk". If your business is in that high risk category, consider an offshore ecommerce merchant account option. Shop several credit card processors - because a good, reputable credit
card processor will be able to set you up with the best rates for an offshore
merchant account for your ecommerce business.
In summary, whether setting up a new business online, or taking the next step in making your existing online business more professional, setting up an ecommerce merchant account has many benefits:
- Having an ecommerce merchant account provides users more payment options
- Makes your website more user-friendly
- Gives users a secure, safe environment to make their online purchases
- By making your site more user-friendly, it can raise the site conversion (more sales!)
- A higher percentage of users prefer credit card payment over PayPal
Don't limit your website's potential by NOT having an ecommerce merchant account!
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