Are you looking into opening a merchant account?
Perhaps you have an e-commerce site ready to go and receive payments. Or maybe your brick-and-mortar business wants to accept credit and debit cards. A merchant account is a way to help secure vital card payments.
Due to the pandemic, you may be a part of the growing crowd transitioning to remote working. So, knowing what is a merchant account and how to manage it is essential for business success.
Before you greenlight your business, give this merchant account guide a read like you would your cash flow statement. While they serve a similar purpose, a merchant account isn’t the same as a regular business account. Understanding your merchant account’s fee structures and requirements can keep your profit line out of the red.
The Mechanics of a Merchant Account
A merchant account is a specialized bank account for accepting credit and debit company payments. In addition, today’s merchant accounts can also accept cryptocurrency payments like Bitcoin and Ethereum.
Heavyweight payment gateways like Stripe and PayPal are suitable for most merchant accounts. But if your merchant account needs high-risk payment processing, consider Get The Bank Card. You can learn more about its unique card payments by visiting https://www.getbankcard.com/.
Setting Up a Merchant Account Bank
Because a merchant account is a specialized commercial bank account, you must set up up a bank that supports this service. Depending on your needs for payment options, the criteria for setting up a merchant account varies. For example, most providers might inquire about your credit history, liens, and bankruptcies as determining factors.
The merchant account service also serves as a buffer between you and the customer paying your business. That way, you don’t interact directly with sensitive customer payment information.
The merchant account provider uses an electronic and encrypted gateway to send the card payment details to your account. But, if the customer has insufficient funds on their card, the payment is instantly rejected. That way, your business finances don’t suffer.
The Pricing Structure
To help maximize your business finances, major merchant account providers provide different pricing structures for payment options. However, it’s also important to point out that while merchant accounts and payment gateways are similar, they are slight differences. Thus, the price structures between the two are different.
The Simple Flat Rate
The most common pricing structure for a merchant account is the flat rate. For example, the flat rate structure applies if you need portable card payments. The flat rate setup charges a fixed amount for your transactions.
The Interchange With Plus
The interchange rate comes from the credit card company. However, the credit card processor determines the plus rate for your company payments.
The Tier Structure
The tier structure applies different card payment rates depending on the type of transaction. Tier pricing is helpful for merchant accounts that sell higher volumes, like wholesalers.
More About a Merchant Account
Don’t hesitate to read our blog for more questions about setting up a merchant account. And don’t pass up the business and finance section for the latest business finance tips. And to help market your business to receive card payments, you want to ensure you get to the digital marketing blog section. You can read more about vital SEO tips and how to measure customer engagement.