subject: Merchant Account – A Must Have [print this page] Merchant Account A Must Have Merchant Account A Must Have
There are very few businesses in existence today that do not accept credit cards or debit cards as a method of payment. Having a merchant account that allows your business to accept these kinds of payments is almost essential if you have any plans for growth.
The driving force here is the consumer's expectation that he or she will be able to buy something using plastic rather than cash. You knew the day of the electronic payment had arrived when credit and debit card terminal started showing up in fast food restaurants. When you can make a low end purchase with plastic there is no reason why you can't make a higher end purchase the same way. Or at least that's the mindset of the consumer.
But to set your business up to handle these transactions means you have to have a merchant account with at least one of the credit or debit card companies. While American Express and Discover are independent companies the bulk of the Visa and Mastercard cards are issued by banks. Your first step in obtaining a credit card processing account is a visit to your bank.
Getting one of these accounts has become more difficult thanks to an overall tightening of credit. The bank looks at your business the same way they would look at someone applying for a loan because that's actually what you're doing in their eyes. They are depositing the credit card purchase, less a fee or "discount" into your account before their card customer has actually paid them. In essence they are fronting you the money for up to 30 days.
There are other concerns as well. If you are a new business the bank is going to want to know that you won't fail and go out of business. They want to know that you can deliver whatever it is you're selling and will not have excessive returns.
When applying for a merchant account be prepared to have a solid business plan, recent financial report, a realistic prediction of number and value of credit card transactions expected, trade references and references or endorsements from customers. This is an important step in the growth of your businessbe prepared to put a good foot forward.
