New to ecommerce?
Isn't it one confusing business to get to master from scratch? Well, it's just
got easier because this has been written for the sole purpose of simplifying
the overwhelmingly strange world of ecommerce for somebody with no prior knowledge,
let alone experience with the subject.
All the complexities you need to know about will be dealt with in vivid clarity.
Merchant accounts, payment gateways, shopping carts, in short everything that
matters in ecommerce. Learn the best way to open a merchant account with rates
and fees, equipment and software costs, customer service, time duration for
fund deposits, and types of eligible businesses.
Going in for an online merchant account can be a confusing process. The most
important factor to keep in mind is what it costs for the privilege of accepting
online credit cards, the amount of time involved from the time a customer makes
a credit card payment on your website till it reaches you, which could be anything
from a few days to even a month or more, and lastly, everything else the service
includes.
What is Merchant
Account?
Merchant account is the term given to
a banking relationship a customer enjoys. The bank gives you the facility
of charging your customers on their credit cards online for the goods
or services you deal in. When a customer makes an online credit card
payment to you, the bank debits the amount from your customer's credit
card account and deposits it into yours. Once a customer has made
the payment, you are expected to fulfill your side of the deal by
having the goods or services delivered in the shortest time possible
to the customer.
It is advisable that prior to opening a
merchant account, consider your situation thoroughly. A strategy is
vital for any business activity you get into. Take into account whether
you seek memberships, how wide your product range is, if it is an
ongoing service, etc and the objectives you aim to achieve.
How to select
merchant account?
A crucial part of ecommerce online is
choosing the merchant provider for a merchant account that is perfect
for your requirements. The more you learn about a merchant account
and its significance, the better position you will be in to make your
choice.
The procedure for getting yourself a merchant
account, begins with the approval process, which may range from 30
minutes to a couple of days. Once the approval phase is completed,
you'll need to wait for about a week to activate your account.
But before you begin to use your merchant
account, a couple of decisions have to be taken. Decide how you intend
to process the credit card transactions. Choose between manual typing
of your transactions into a software program or credit card terminal.
Alternatively you could opt for real time credit approval by equipping
your website to process transactions automatically.
In order to process credit card transaction,
a software or tool will be necessary. In case you purchase equipment,
get your merchant provider to program it for authentication with their
network. For the real time option on the other hand, you have to get
yourself affiliated with an Internet gateway that you'll have to pay
some kind of a monthly fee, to provide you connection to your merchant
account.
A number of fees are involved in accepting
credit cards through a merchant account. Here is a guide to understand
them better.
-
Startup Fee: This one time cost to set up your account could be
in excess of $99 depending on the provider you choose.
-
Credit Card Fee: Credit card carriers charge a credit card fee directly.
Visa and Mastercard have a fee lower than that of American Express
and Discover. 1.5% to 4% deduction per sale is the usual rate depending
on the type of card and pre-negotiated rate. Taken off the top, it
gets deducted from the charge amount before deposit in your account.
-
Transaction Fee: This is the merchant provider's charge for covering
costs of network, equipment, etc and may be between 10 cents to $1
per transaction. Also taken off the top, the deduction is done before
depositing into your account.
-
Additional Fees: Providers may differ in the additional fees they
charge for your account. Monthly statement fees, minimum traffic fees,
charge back fees are typically included. This is why you need to be
aware of the terms before signing up with a provider.
Linking your
Credit Card Processor with your Merchant
Account!
Opting for an online credit card processor
will require details to link transactions to your merchant account.
An ecommerce merchant account number that comes with the account has
to be given to the processor. With every transaction that follows,
the money minus commission, is delivered to your account. Many merchant
providers can guide you in acquiring this facility. A broad understanding
of the entire process will enable you to select the right provider
to partner your path to success.
