So, you’ve developed a business plan, gathered the necessary resources to bring your product or service to market, and are now ready to begin accepting cash in exchange for your product or service through your new website. The problem, of course, is that the days of consumers lugging around wads of cash are long gone. In today’s credit-based economy, most retail sales are done with credit or debit cards. As a young business, it is imperative that you not lose any sales due to the inability to take payment. In this article, we will discuss the various ways an entrepreneur can accept credit card payments by utilising merchant services.
Paypal
Paypal is the easiest option for small business owners. There are no upfront costs with Paypal, no setup fees, application fees or monthly fees on the basic package. This can serve as a significant benefit for small businesses who are just starting out because if the business doesn’t make any money, there will be no merchant account fees. Paypal simply takes a small percent of each transaction.
Installing a Paypal account on your website is very easy, and since Paypal is an internationally known brand, customers will have no doubts regarding the trustworthiness of your merchant account provider. These are major benefits to utilizing Paypal. There are loads of ways that you can utilize Paypal to improve your business. Furthermore, there are many businesses that are now starting to use bitcoin to paypal payments which are becoming increasingly popular in technology-based businesses.
The drawbacks, however, are real. First of all, if you use Paypal, then your customers are going to be sent to a 3rd party website (Paypal) when they purchase. Even though it is Paypal, this can cause customers to second-guess their purchasing decision. Also, Paypal is not highly customizable. Creating coupon codes and discount codes can be difficult with Paypal in relation to other merchant account providers that specialize in customization. The bottom line is that if your business is very new and the products/services you sell are very straight forward, Payal may be a great decision to launch, but as the business grows, it will be worth it to look to upgrade to a professional-grade merchant account in the future.
Merchant Account Providers
Besides Paypal, there are dozens of merchant account providers that provide more customizable merchant gateway options. The major advantages these types of providers hold over Paypal is two-fold:
- Invisibility: When customers purchase your product, they will not be re-directed to a 3rd party site. It will all take place inside your ecosystem, which is very important from a branding perspective.
- Customization: Paypal can tend to be rather inflexible, while other providers make coupon codes and discounts much easier.
When shopping for a merchant account service provider at a website, such MerchantSeek.com, make sure to focus the search on the following criteria:
- Online reviews of current and past clients
- Initial setup fees
- Transaction fees
- Hidden fees
Make sure to fully investigate each of these criteria. Once you read through the legal agreement, it may be worth considering a legal review from a lawyer. The few hundred dollars you spend in legal fees will be well worth it if the lawyer finds areas where you could have lost thousands in the future.
Types of Cards
Once you have decided on a provider, the only major decision remaining is which credit cards to accept. Identify the exact transaction fee you will pay for each type of credit card. Many small business owners do not accept American Express, for example, because its fees can be double that of Visa. These small fees can add up over the course of a year, so consider choosing only 2 or 3 credit card providers in order to keep your fees low.
