A merchant account is essentially a specialized bank account tailored for businesses to handle their essential credit card transactions and various online payments.
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Are you looking to trim down those pesky credit card processing fees? Even seasoned business folks seek ways to slash those costs. However, making the choice between opening a business bank account or setting up a merchant account can be quite the puzzle. Furthermore, business owners might ponder whether it's wise to enlist an igaming payments service provider to handle their transactions. When it comes to small businesses, opting for payment service providers can be a pocket-friendly choice. On the flip side, for larger enterprises, merchant accounts tend to be the go-to solution.
In this piece, we will talk about an ingenious approach that enables you to wave goodbye to bothersome surcharge fees and welcome credit card payments without requiring a merchant account.
Exploring the Concept of a Merchant Account
The number of merchant accounts you require depends on your product offerings and the geographic scope of your sales.
Take, for example, online eCommerce enterprises; they often make use of internet merchant accounts. It's worth noting that not every bank extends the privilege of having a merchant account, and even if they do, you'll invariably need to navigate an application process. This requirement stands firm, even if you already possess a business bank account with the same financial institution.
Understanding the Function of a Merchant Account
A merchant account is typically furnished by a third party, known as the merchant acquiring bank. These external service providers take on the pivotal role of overseeing the interactions between the cardholder, their affiliated cardholder bank, and keeping your business in the transaction loop. Here's how it works: The funds from customer transactions flow into the merchant account, and then the credit card processing service takes its slice. Subsequently, the remaining balance from these purchases finds its way into the business entity's bank account, which remains accessible to all the business partners involved.
Obtaining a merchant account from a merchant-acquiring bank requires you to follow a thorough procedure. You'll need to furnish certain essential details, including the nature of your business, its operational history, and financial documentation related to the business entity. In scenarios where a small business boasts a relatively brief credit history, there's an increased likelihood of securing a merchant account through the same bank it maintains business relations with. Conversely, if your business carries a higher risk of encountering fraudulent activities, the acquiring bank may either reject your application or impose elevated fees, given the elevated level of perceived risk.
Pros and Cons of Merchant Accounts
Merchant accounts come with their own set of advantages and disadvantages.
The Upside
Stability: Merchant accounts are typically offered by well-established banks known for their commitment to continuously manage the business relationships they establish. This means there are fewer chances of encountering payment delays or other account-related issues in the long term.
Better Pricing: Businesses generating over $10,000 in monthly transactions are often eligible for more appealing pricing packages and additional payment-related services.
The Downside:
Inaccessibility for Start-Ups: For start-up businesses with limited sales volume or a relatively short operational history, securing a merchant account can prove to be quite challenging.
Lengthy Application Process: Applying for a merchant account tends to be a more time-consuming endeavor, requiring significant documentation and scrutiny.
Limited Savings: In comparison to other service provider options, the savings on credit card surcharge fees with a merchant account may not be significantly higher, potentially making it less cost-effective for some businesses.
Embracing Credit Card Payments in the Absence of a Merchant Account
High risk payment processing service providers can be the ideal solution to sidestep the need for your very own personal merchant account. These entities open the door for you to accept credit card payments even in the absence of a dedicated merchant account. These companies maintain their own merchant accounts and pool the funds from the businesses they cater to into these specialized accounts.
They smoothly transfer these accumulated funds into the business's bank account within a few working days, all while deducting the necessary surcharge fees. Some of these companies, like Pay.cc, sweeten the deal with a variety of payment structures to cater to your specific needs and preferences.
Choosing the Right Service Provider Makes a Big Difference
High risk payment processing service providers, such as Pay.cc, alleviate your concerns by handling all the necessary paperwork and setting up your merchant account. This service extends the benefit of approving credit card processing t for your customers, even if your business doesn't possess a dedicated merchant account.
With this solution in place, you can seamlessly accept credit card payments without any worries. What's more, the surcharge program comes to your rescue, ensuring you don't have to bear the burden of credit card processing fees. In sum, you empower your customers to make instant payments without any inconveniences.
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