Merchant Account Payment Gatways
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Competitive Merchant Account Card Rates
Every company that does business online or in person needs a merchant service account. These are accounts that allow them to accept credit and debit card payments. While the process is a bit more complicated online than in person, the main difference is the price or commission merchants are charged for this essential service.
How does it work? When a person buys an item with a credit or debit card, either online or in person, the business must have these transactions processed. The companies that provide this service are usually banks or financial institutions who receive payment directly from the credit card companies. They then take a small commission for processing the payment and send the rest to the merchant.
But competitive merchant account card rates can be difficult to find, since these rates are based on the risk of the industry the company competes in, they vary. It is also a fact that online businesses typically have much higher rates than real brick and mortar businesses.
The reason for this is simple: a real shop receives payment directly from the consumer and they keep a signed copy of each receipt in their files. This means that if and when there is a customer complaint or dispute, the business can produce the receipt with the signature on it and protect itself from the scourge of the processing industry: chargebacks.
A chargeback is when a customer demands a refund for an item from his credit card company and the company then must investigate the claim. As you might expect, chargebacks are fairly rare for real businesses because they have documentation of the sale, but online they happen all the time. And since the merchant service provider is responsible for the transaction, they are the ones required to return the money if something goes wrong. For this reason and many more, these companies customarily charge online business much higher rates than traditional ones.
Though an online merchant service account can be difficult to obtain, there are several reputable banks and financial institutions that offer services to business that compete in risky industries. The best thing to do is to go online and compare the rates of four or five providers before you apply for a merchant account.