If you want your startup to make money, you need to be equipped to accept any kind of payment your customers want to give you. These days, that means you’ll need to take more than just cash and checks; today’s customers want to pay with credit and debit cards, and corporate clients may want to pay with ACH debits instead of paper checks (although paper checks are still a preferred payment method for many companies, as well as for consumers who want to make large payments).
You’re going to need a payment processing solution that allows you to accept payments of all types, especially if you’re running a retail storefront of any kind, and that means you need a merchant services provider. Here’s what you need to know about choosing a provider and qualifying for a merchant services account.
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You Need a Merchant Services Provider
If you’re starting a business and you don’t have a merchant services provider or don’t plan to accept credit and debit card payments, you could be missing out on a lot of sales. You might be able to skate by if you’re dealing only with corporate clients who will want to pay by check. However, if you have any kind of retail storefront or plan to sell goods and services to members of the public, you’re going to need a merchant services provider to help you accept credit card payments — and you may even need one if you’re dealing with corporate clients.
Cash is quickly becoming old-fashioned as a method of payment. Credit and debit cards have become just as common as paper money, and lots of people prefer them to cash. Sixty-six percent of point-of-sale (POS) transactions are performed with credit or debit cards, and one-quarter of Americans don’t carry cash at all. One-third of Americans aged 18 to 35 don’t carry any cash, and among those who do carry cash, most carry no more than $25 in their wallets. So, if you want your customers to make impulse purchases, or to make purchases at all, you’ll need to be able to accept the credit and debit cards they prefer to pay with.
How to Choose a Merchant Services Provider
When it comes to choosing a payment processing company, you might be tempted to just go with the bank that handles your business accounts. However, that might be a mistake because large banks often charge more than merchant services providers who specialize in payment processing. Fees might seem low on paper, but they can add up over time and with a large volume of transactions, so you want to pay as little as possible.
Stripe is an excellent
You’ll want to choose a provider based on the size of your business and the volume of your transactions because the fees you’ll pay will vary depending on how many transactions you’re processing and how much revenue you’re generating. You’ll also need to consider how you’ll be accepting payments, whether in person at a retail POS, over the phone, through an online web store or all three. Fees may vary depending on what methods you’re using the accept payments but will range anywhere from 1.75 to 2.9 percent of the transaction price, plus an additional flat fee which is typically less than a dollar per transaction. Shop around for the best price, and don’t forget to ask how long it will take payments to hit your bank account as this will affect your cash flow.
Qualifying for a Merchant Services Account
As a startup, your business might be considered high-risk by merchant services providers, but that doesn’t mean you can’t get a payment processing account. Good credit will help a lot here, and so will shopping around. You might need to pay a slightly higher fee to open your first merchant services account, but it’s worth it to offer your customers the convenience of multiple payment methods. Once you have some business history and a good record of responsibly using your merchant services account, you’ll be able to get lower fees and cheaper services.
A merchant services account is a must for any new business owner, especially if you plan to open a retail store. You’ll be able to offer your customers the payment options they need, and you’ll make more money as a result — and that’s good news for you, your investors and the future of your company.
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