Both Traditional and Online Businesses Need Merchant Services

Merchant accounts that allow business owners to accept a variety of customer preferred payment methods have become commonplace in traditional business settings. Even small businesses, such as fast food providers, convenience stores and kiosk sized retailers have accepted the fact that allowing for multiple popular payment options is a wise decision. Far few consumers are carrying cash these days, and even those who are often prefer the safety and security of paying via credit card or check, if for no other reason than to have an accurate, detailed account of each purchase. Slowly but surely, online vendors are realizing this as well.

The popularity of Paypal, a service which requires consumers to set up accounts similar to an online banking institution, kept many online businesses from opening merchant services for the benefit of their customers. Disadvantages to using the Paypal system were soon evident, however, as bad experiences with the system were publicized by both merchants and consumers. The stigma of a flawed system was not the only consideration for Internet shoppers and online businesses, however. Many consumers were unwilling to use a system that required setting up an account, memorizing yet another password and using a third party to transmit credit card or bank account information.

The level of convenience available to consumers declined sharply as a result of having to navigate a completely new and often confusing separate web site in order to make a simple transaction. On the merchant side of the equation, the realization that Paypal offered no additional fraud protection and charged rates very similar to and often higher than merchant services providers has caused many to second guess it’s usefulness. Of particular concern is that there is simply no way to determine the amount of lost sales due to consumer hesitation aimed at opening a Paypal account.

Consumers generally feel more comfortable using payment formats that mirror those used by their neighborhood retailers. When purchasing small items especially, many will not go through the trouble of spending an additional five to ten minutes online in order to purchase an item that only costs a few dollars. While the prices of these items may be small, the losses incurred by business owners who don’t offer a tried and true merchant account system can be substantial.


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Finding the best merchant account providers

If you want to receive fast payments or expand your business to more customers, it helps to accept credit card payments. Do business by mail order or over the Internet, and it becomes a necessity. While applying for a merchant account can seem cumbersome and confusing, the best merchant account providers will take the time to walk you through the process.

First, whether you use BuyerZone's free request for quotes service or do your own research online, make sure you talk to at least four to six providers. This way, you'll become familiar with the types of questions the best merchant account providers ask, and you'll be able to see which companies are interested in getting you the best rates and services and which just want to complete the sale.

Solid customer support is the most important thing you should look for. The last thing you want is problems with processing your credit cards, and the best merchant account providers will help ensure that doesn't happen. Learn what kind of live customer service they offer, how they handle chargebacks, and how quickly they respond to service calls. A great way to find strong customer support is to compare services from BuyerZone's best merchant account providers.

The best credit card processing providers also try to learn everything about your business before setting you up with an account. First, they need to investigate that you are a legitimate business - both to protect their reputation and check if you qualify for better rates. Next, they need to learn how you will use your merchant account. If it's in person, they have to make sure you have a credit card terminal. For mail order and Internet transactions, they'll need to help you securely accept credit cards.

Additional characteristics of the best merchant account providers

Provide all fees and charges in writing
Offer references that you can contact
Clean record with the Better Business Bureau
Willing to lower set-up and monthly fees if your monthly volume is low
Have helped businesses similar to yours secure merchant accounts
Find ways to help you qualify for low discount rates
Provide inexpensive or free credit card terminals
Ultimately, the best merchant account providers are those that treat your business like a partner, taking the time to understand your needs so they can offer a solution that you'll be happy with for many years to come. And the first step in finding the best credit card processing service is using BuyerZone's free merchant accounts quote request service to get connected to qualified suppliers in your area.

Reference: http://www.buyerzone.com/retail/credit-card-processing/ar-best-merchant-account-providers/

How the Credit Card Processing Works

When a merchant makes a sale and swipes a customer's credit card, the card number, the amount, and the merchant ID travel over the credit card processor's computer network. The credit card processor is usually a company that does nothing but provide credit card processing services.
From the processor's network the transaction goes to a credit card computer network. If the customer is using Visa, for example, the transaction will go to Visa's network. In turn, the electronic transaction goes to the bank that actually issued the card. The bank then checks the account and verifies the customer has adequate credit to cover the purchase. The bank then sends the merchant an authorization over the network. Now the sale is complete, but the transaction is not — no money has changed hands yet.

At the end of the business day, the merchant sends that day's charges, in a batch, to the credit card network for processing. The transactions travel via the merchant's credit card processor. Individual transactions are then stripped out and sent back to the individual cardholders' banks. Banks then debit cardholders' accounts and make appropriate payments to the merchant's credit card processor through the Federal Reserve Bank's Automated Clearing House.
The credit card processor then credits the merchant's bank account for the transaction amount, minus its fees for the transaction. Those fees also go toward paying transaction fees to the issuing bank and the credit card network. Despite the use of computers, it can take two business days before the merchant's account is credited.

Reference: http://youtu.be/rItDwdtvMFw

What is electronic funds transfer (EFT) processing?

EBT, or electronic funds transfer, is a computerized system that performs financial transactions electronically without any paper money being sent from one bank to another. The use of electronic funds transfer has become more widespread with the personal computers, improved networking systems, and security features such as encryption. EFT processing is the process of transferring funds initiated by electronic means including ATMs, computers, telephones, point of sale systems, and other electronic terminals. Electronic finds transfers may also be referred to as automatic bill payment, automatic debit, electronic bill payment, or direct debit/deposit. Most users of EBT processing find it safe, efficient, and less expensive than using traditional paper checks. In fact, many institutions such as banks offer lower interest rates on loans or free services if customers use ACH/EFT processing.

What type of transactions can be handled by EBT payments?

EBT payments can be used for both debit and credit transactions. The following transactions can be executed by electronic funds transfer: sale, withdrawal, refund, cash back, deposit, payment, and inquiry. According to NACHA, 43 percent of all U.S. households use ACH/EFT payments for at least one recurring payment per month. In addition, 84 percent of ACH/EFT payment users say they are very satisfied with using EBT/ACH.

How are EBT or electronic payment services transactions authorized?

There are many security protocols in place to ensure that electronic payment services are secure. An electronic funds transfer goes through several security procedures throughout its transfer through the network ensuring that the whole process is legitimate and legal. Card holders typically are required to provide their signature as a form of authentication, and sometimes a personal identification number (PIN) may be used. Other means of authentication involve using a credit card stripe reader to read the card's magnetic data. Data is sent to be authorized using encryption to maintain the integrity of the inquiry for electronic payment services. For transactions where a network connection is not available, electronic payment services can be authorized offline. There may be higher rates involved, since the security risks are greater. Some security measures taken include checking to make sure the card number is not on a list of “hot cards,” which is a list of known stolen credit cards, limiting the number of offline transactions, and random online authorization.

Reference: http://www.ebtprocessing.com/

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The Top 10 Benefits of Accepting Credit Cards

1. Accepting credit cards will often double… even triple your current sales. Studies show businesses that accept credit cards can see a huge increase in volume… almost overnight.

2. It will legitimize your business. Studies show that when you display credit card logos as forms of payment you accept, these logos create a sense of ‘trust’ in your customers mind, and if they trust you, your customers will buy from you.

3. A merchant account improves cash flow. Accepting cards has a huge positive effect on business cash flow. Even if sales don’t increase (and they almost always do) your business will benefit by having the money from the credit card sale instantly delivered to your bank account. No more waiting for check to clear, or sending out time consuming invoices, waiting for payment. With credit cards you get your money from your customers quickly and easily.

4. Over 90% of web purchases are made using credit cards. If you are selling ANYTHING on the web and you are not accepting credit cards, you are eliminating 90% of your potential buyers.

5. Grabs Impulse buyers. Credit card holders buy more on impulse, are more affluent, and buy 2.5 times more merchandise than non-card holders.

6. Convenience. Let your customer decide the most convenient way to buy from you. Many customers want to use credit cards because of reward points or reward miles associated with their credit card. Customers are more likely to buy from a business that accepts credit cards than one who does not. Don’t lose a customer to a competitor just because you don’t accept credit cards.

7. Larger orders. The average order size of someone paying via credit card tends to be larger than someone paying by cash or check. And larger orders = more profit. In addition, customers paying by credit card tend to place extra orders and order more often.

8. Competition. Your competition is already accepting credit cards. You need to accept cards in order to survive.

9. A merchant account is inexpensive. Gone are the days of high rates and fees. Today’s credit card processing rates are so low even the smallest mom and pop outfit can easily accept credit cards. In fact, usually the increase in sales a business receives when they do accept credit cards more than covers the small costs involved. As a result, by accepting credit cards many businesses make more money!

10. Quick and easy setup. Many businesses think getting setup to accept credit cards is a long and tedious process. No more! Most of the time you can be up and running within 24 – 48 hours. If a provider tells you otherwise, go somewhere else!

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