How to Set Up a Merchant Account for Your Online Business
The good news is that gaining merchant status has become easier for e-commerce businesses because banks have accepted the idea that businesses don’t have to have a physical storefront to succeed. However, approval of a merchant account still takes a long time, and it also involves some exorbitant fees. Banks look more positively at companies that have a proven track record.
Conventional banks are reliable and experienced, and are likely to be around for a while. New web-based businesses that specialize in giving merchant account status for online businesses welcome new businesses and give you wider options and cost savings, but they’re new; Their services may not be reliable and their future is less certain.
You can find a long list of organizations that provide business accounts for businesses online at one of the Yahoo! index pages.
The list is so long that knowing which company to choose is difficult. Consider visiting Wells Fargo Bank. which has been operating online for several years and is well established. The Wells Fargo website provides a good overview of what is required to obtain a merchant account.
A web-based merchant account company called GoEmerchant.com allows you to set up and process credit card transactions. (The site also accepts PayPal payments.) This company offers shopping cart, credit card, and debit card processing to companies that accept online payments. MyTexasMusic.com chose to use GoEmerchant after extensive research because it found that the company provides reliable processing, while protecting the business from customers who purchased items fraudulently.
One advantage of using a payment option set up by PayPal Payments is that the system (which originated with the famous companies CyberCash and VeriSign) was well known and well known before PayPal acquired it.
In general, your chances of getting merchant status are enhanced if you apply to a bank that welcomes online business, and if you can provide good business records that prove that you are a viable and profitable business.
Be sure to ask about the discount rate the bank charges for online transactions before applying. Compare the online transaction rate to the traditional “card swipe” purchase rate. Most banks and credit card processing companies charge 1 to 2 percentage points extra for online sales.
Do you use accounting software, such as QuickBooks or MYOB Accounting? The manufacturers of these programs enable their users to become credit card merchants through their websites.