Based on a 2013 report [1], by 2011, 66% of global spending involved cashless methods. The volume of cashless transactions was projected to be growing at an annual rate of Given the rise cashless payments, the modern business must adapt to this growing demographic that prefers not to carry hard cash if it is to maintain a competitive edge.

A merchant account is designed to facilitate the processing of cashless payments. Initially set up for credit card payments, options have arisen to cater to emerging payment methods such as mobile wallets, reloadable prepaid cards, reward cards and gift cards. The business is allocated a unique merchant ID which enables the account provider to verify customer information during the processing of the payment.

To allow the business owner to successfully navigate the myriad offerings available in terms of merchant accounts, various factors come into play, some unique to the particular business and some general. This article highlights 5 things that you should look for in a merchant account provider.

Costs involved
Apart from the overall fit into the business budget, the business needs to take into account the pricing method used by the merchant account provider and the transparency of the account costs. Currently, there are three common pricing plans available: flat rate, tiered and interchange-plus. Experts recommend interchange-plus pricing, which involves a percentage of the processed payment as well as a fixed cost per transaction. In addition to the payment plan, the other fees must be taken into account, with some account providers having a number of hidden fees listed in the fine print. Such fees may include monthly or annual account maintenance fees, authorization fees, customer service fees and online processing fees.

Modes of Payment Supported
For maximum flexibility, a merchant account that supports a wide variety of payment options is necessary. The major debit and credit cards used by the clientele should be taken in to consideration, as well as the type of card- a versatile system supporting both modern chip-based EMV cards as well as the traditional magnetic stripe cards would be the best option. Additional payment methods common in the area might include mobile money and prepaid gift cards. Where online payment is required, it should be noted that in addition to the merchant account, the business will require an online payment gateway, and, depending on the account provider, this might be bundled with the merchant account as a single solution, or one may be required to separately source for a gateway provider.

Integration with book-keeping software
Since one major purpose of incorporating cashless payment is for increased convenience, the ability to integrate the payment processing system with existing book-keeping software is an important feature for the business owner. This eliminates duplication of data entry tasks, with payments logged into the relevant accounts as they are received and processed. A number of merchant account providers provide integration with QuickBooks, thus, for a business already using it for record keeping, the addition of a payment method that can seamlessly be integrated into the existing setup is a definite plus.

Account set up
Down time can be costly for a business, therefore the time taken to set up the merchant account, from the signing of the contract to the processing of the first payment needs to be taken into account. Many providers offer free equipment on account setup, and will also facilitate the installation of the equipment and setup of necessary software. The shorter the time it takes to get the system up and running, the more attractive the account provider.

Online Payment Features
Given the rise in business transacted online, available options for online payments are a key feature to look out for. Accounts that allow for online shopping cart integration are a necessity for businesses that allow customers to make orders directly from their websites. Additionally, for businesses that may have international customers, the integration of IP filtering is a convenient feature, particularly in cases where shipping charges may need to be included in the final payment. For service providers, the provision of recurrent billing is convenient, particularly for subscription type services.

All said, there is no one-size fits all merchant account, but the major factors listed above will go a long way in whittling down the list of potential account providers for the business owner.

[1] “Mastercard Cashless Journey Report”, Mastercard Advisors, 2013.