Choosing Your Merchant Account for your Online Store

Published on
March 31, 2011
a man in front of a laptop

Okay, let me save you the agonizing waiting, nail biting, exasperating waits on the phone and impatient grimaces from your web developer... please apply for your merchant account the minute you start your web development project. I mean, don't even let the ink dry because getting your merchant account set up can be a trying experience no matter who you select as your provider.

Choosing a merchant account provider C4040-221 can be an overwhelming experience. Just try a Google search... egad, how to select?

First, consider only real merchant account providers and stay away from banks. People always turn to their bank, because, well... it's easy, your familiar with your bank, it's related to money, you like the free coffee t hey give when you walk in (oh wait, they don't really do that anymore). In today's high-tech Internet world, banks slog through the waters of the internet like an elephant after dinner and just aren't up to date on the latest technology, especially when it comes to e-commerce and wireless processing. In all likelihood, your bank is outsourcing to a company that specializes in online commerce and knows what they are doing.

Plus, and this is anecdotal evidence, I actually started getting gray hair waiting for the bank to come through with the vital key code I needed to launch the site!

So how do you choose the right merchant account provider?

First and foremost, find a provider that has a proven track record. Not just time in business, reliability and founder experience. Check their Better Business Bureau report. If there are numerous complaints, turn around and walk away. You'll need to take your business elsewhere.

Second, find out if they offer a money back guarantee. This way you can try them out for a period of time and see if what they provide you with matches what they promised. Any reputable merchant account provider will give you a guarantee.

Third, look into their customer service practices and their technical support options. Do they offer a toll free customer service number? What are their customer service hours? Do you have to submit a work request online? Are there actual humans operating the customer support center? Important to know...

Next, and this is a big one, the fees. Make sure they are reasonable, and one of the lower cost options out there. CAUTION: Be careful of those that offer deceptively low rates. If you find a provider offering significantly lower rates than everyone else, then question that in detail and C4040-224 get out the magnifying glass for the contract to spot any hidden fees. After going through a couple of providers as a company, I can tell you there are quite a few creative scaling practices.

You also shouldn't have to pay an application fee, setup fee, installation fee, programming fee or annual fee. Those are a lot of fees that many merchant account providers will try to stick you with. Be careful.

If a company is trying to charge you extraordinarily high equipment prices or if they're trying to push you into a lease, run the other way. Stay away from leases and never pay more for your equipment than what it's worth.

Competition is fierce enough now that a merchant exists for every business. You want to make sure your merchant account provider fits your requirements, such as international charges (etc). In our experience, our clients who run directory sites or seminar types of business have difficulty getting approved and this can through off the launch time line if you have to apply to another merchant. The merchant just doesn't want to risk and unhappy customer who asks for a charge-back on a service that may be vague. Obviously, if your new Gucci bag is a fake and you want to return it, no problem. But what if you didn't like the seminar and want to "return" it?

Make sure that you're not given a cap in your monthly volume. Imagine that you're having a great month in sales, more than you've ever sold before. Suddenly, you're halfway through the month and you can't accept anymore credit cards. This can be the downfall of your business and it won't be your fault. Or will it? It may be if you didn't check into monthly caps before signing up with your merchant account provider.

So you've done your research, now what do you do? Get on it! Your web developer is waiting for you...

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