7 Things To Know About Online Merchant Accounts

7 Things To Know About Online Merchant Accounts

As jobs are lost and the economy tanks further by the day, it seems the last bastion of possibility lies in making money online. And that might not be a bad idea for many people. If you are seriously looking for a way to sell products or offer your services, you probably need to start thinking about finding a merchant account. Not sure how? Pay attention to the 7 things to know about online merchant accounts.

  1. A merchant account is nothing more than a means for you, the merchant, to have your customer submit payment. They generally combine two separate functions and you might even have fees broken up on your monthly statement to show the fees you pay for collecting and processing money, and the fees you pay to get paid.
  2. They can cost a tiny fortune between fees and surcharges. Make sure your read the terms and conditions and anything else that you need to sign. Seriously. The smaller the print, the more time you should spend reading it! Make sure you know what you will be charged in discount points. Don’t get excited – you aren’t getting a discount. Your are paying a percentage of your sales to the company(ies) clearing the payments. These points can be as low as 1.9% and reach highs of close to 6% or more. American Express has historically charged the most to use their card, which is why many retailers have stopped accepting Amex cards.
  3. These companies aren’t at all concerned about the success of your business or your overhead. They are indeed concerned about their own success, and in order to guarantee their futures, they think of every possible way to assess charges and fees that are totally insane when it comes to logic. Look for something that talks about early termination; you might get stuck in a multi year contract without knowing it.
  4. As you continue reading the fine print, look for deposits, monthly charges, and automatic debits from your checking account. Again, many of these companies are in business to do nothing more than charge you fees in exchange for providing little service. Some charge you hefty monthly fees no matter what. (As if your “discount points” weren’t enough, right?)
  5. Let’s say you didn’t sell a minimum of $500 last month. You might see some odd and very high charges on your monthly statement! The less you make, the more they charge!
  6. It can take over a week in some cases to actually get paid! If you’re used to using PayPal, forget those days!
  7. And last but definitely not least, watch out for unauthorized customer refunds. Merchant accounts are notorious for listening to those crazy customers who will do anything they can to get their money back. You will find out at the worst possible minute that your merchant processor has refunded money to a customer without asking you for your opinion or for any documentation. Even if your website specifies “no refunds” it doesn’t matter! You can spend months trying to get through mediation, but rarely will you win.

If you really want to check out a merchant account, stick with well known processors.

 

Shubham Aggarwal