If your business needs its first merchant account, you may have questions about how merchant service providers (MSP) work, and what benefits they offer. For new merchants, knowing these things can be critical for a good business experience. Below, we answer commonly asked questions about merchant accounts.
Are there certain accounts that every business needs?
The accounts a business needs is determined by how it sells. For example, a business that only sells in-store will need a retail processing account, but not a wireless account. And a business that sells only online will only need an Internet processing account.
In general, merchants should have as many business merchants accounts as their customers have payment preferences. For many businesses, this means having the following types of accounts: retail processing, Internet processing, and mail/telephone order.
How many account fees can I expect to pay?
Account fees and their amounts vary by MSP. But merchants can expect to pay the following fees regardless of the MSP they use: discount rate (a collection of fees, charges and dues a business pays for card services, expressed as a percentage), transaction fee, monthly gateway fee, monthly statement fee, and monthly minimum fee (the difference between a business’ actual transaction fees and the amount it is required to meet).
Because fee amounts can vary widely by MSP, account type, and time of year, they should be calculated based on each MSP a business considers contracting with.
Will my business’ bank process its card account transactions?
Chances are your business bank will not process your business’ card account transactions. This because the bank that sponsors an MSP to card companies processes the transactions, the funds from which are transferred to your business’ bank. MSPs are required to list their acquiring bank on the first page of their website. Most MSPs list it near the bottom of the page.
Is really necessary to have an ACH account for check payment?
Chances are that your business could benefit from having an ACH account. Currently, over 70 million Americans do not have a general-purpose credit card, and 90% of Americans have a checking account. ACH accounts reach this population segment, and offer a business the advantage of accepting check payments securely.
Do merchant accounts measurably boost business revenue?
While an MSP cannot promise to boost your business revenue by providing merchant accounts, merchant accounts do support revenue growth. The more ways customers have to pay, the easier it is for businesses to make sales.
What happens if I cancel my account early?
Merchants can cancel an account at any time. However, an account cancellation fee is imposed when the cancellation occurs during the contract period. Account cancellation fees are often comprised of: the combined monthly minimum payments left in the contract period, the combined monthly statement fees left in the contract period, and a fee based on the amount of profit a merchant service could have earned over and above these compiled fees had the account not been canceled.
At AVP solutions, we have years of experience providing account solutions that support revenue growth for all types of businesses. Whether your business needs its first merchant account or additional accounts, contact us today.