It can prove to be intimidating starting a new merchant account. Why? With a lot of information out there, it’s challenging wading through it all. Majority of people are normally pressed for time, and this makes it difficult weighing all aspects. Deciding on which kind of account to open and how to open it is vital. In this article, we are going to make your task simpler, since it’s going to discuss 10 things to know when opening a merchant account. Read on.
Note: Your merchant account is more than a mere status symbol when you mean business. It’s a part of a savvy and solid business plan. Therefore , before taking the plunge and opening a merchant account, these 10 points are going to be important.
- The Account Type You’re Using
You should be aware that a merchant account is not just, on the surface, a merchant account. There are three major kinds of merchant account. They are: MOTO Merchant Account, Retail Merchant Account, and Internet Merchant account. Therefore, it’s important that you take some time to make sure you’re opening the most appropriate account for your business. Even when your business is sole proprietorship, you are going to require a business bank account prior to opening your merchant bank account. Well, you’re able to open an account in just around 15 minutes at your local branch. You will only be required to have your business license employer identification number (EIN)-which may be your social security number when yours is a sole proprietorship without employees. Also you may apply for EIN and instantly get it by visiting IRS website.
- Know the Operating Cost You Should Expect
Different accounts are going to come with different operating costs or fees. Therefore, to stay on top of things, you should exactly know which fees or costs affect your account. Make some note of the fees that are imposed by each provider prior to making a decision on your choice. Are they charging for the credit card reader or it’s provided for free? Know all these details before opening a merchant account.
- What’s your Risk Category
Your services or products are going to be grouped officially into risk categories, which range from High to Low-risk. This grouping or classification of your services or products may have some impact on what kind of a merchant account the business is eligible for, and the amount of fees you may end up paying. Before signing up, ensure you discuss this aspect with your service provider.
- Do You Posses the Correct Licensing?
Several service providers will require you to possess a business license prior to giving you a merchant account ID or providing you access to an account. Therefore, you should check if you possess the correct licensing before starting the process of opening a merchant account.
- And is the Merchant Account Going To Be Compatible with the Business Model?
Not all accounts are going to suit, for instance, an online e-commerce model, while other accounts are going to be more appropriate for this means of selling than the traditional shop selling. You need also to discuss this with your merchant account service provider, and make sure you find the most appropriate account for your business.
- The Methods of Payment You Need to Support
While majority of retailers are going to almost exclusively deal in debit and credit card, and cash transactions, there are several other means of payment which your merchant account might need to support. They range from Interactive Voice Response to Netbanking to cheques. Make some list of what you need to support, and ensure that you’re covered.
- The Level of Support You Require
A reputable merchant account service provider is going to operate a host of various services as well as support packages at differing fees to the account holder. You should decide the level of support you require, and clearly communicate this to your provider, negotiating yourself some deal which suits your business and your budget.
- The Level of Reporting Capability That You Require
In business world, knowledge is power. Therefore, it’s significant you gain access to as much information as possible relating to the organization. One great way of achieving this is reporting. However, different accounts are going to provide different levels of report commissioning. Therefore, it’s vital to evaluate if or not your account is going to satisfy your requirements before proceeding.
- What is the Cost of Termination?
When you are not satisfied with the service you’re provided, and you need to move to another provider, you might find yourself hit hard by a termination fee. Majority of reputable service providers are going to spell out this plain and clear to you before signing up. But always ensure you are aware of this information before you proceed.
- What’s the History of Your Service Provider?
Choosing your service provider is just as crucial as choosing the account itself. You want a provider with a clean and demonstrable track record in client satisfaction, functionality, security, and reliability