A lot of people in the industry like to discuss the benefits and disadvantages of credit card processing and they seem to throw this point around just about everywhere. If you want to sell online and accept payments through cards, there are three main features that you’ll need. After which, the selection process becomes much easier.
First, payment solutions come in different forms. The three options are merchant account processing, direct debit, and click-and-collect. Many people choose to go with a merchant account processing. This option allows you to use any of the major processors and gain access to a huge network of businesses.
The key benefit to using merchant account processing is that you won’t have to do anything special when selling. You’ll just be able to place your order and everything else will be taken care of.
One big disadvantage to choosing merchant account processing is that you will have to pay high fees. Some of the companies that provide this service charge about three times as much as a traditional credit card processor. That is not a bargain.
Another option is direct debit processing. This works very similarly to the merchant account processor but without the fees. This means that you get a bit more flexibility in terms of pricing, but it does mean that you won’t have to pay the higher fees associated with a merchant account processing.
Most people start their research by looking at the available options, price, and fees associated with each method. From there, they’ll narrow down their choices to either one or two processors.
When comparing these options, make sure that you compare everything that is offered on the merchant’s website. While they can be a great resource, it’s important to be able to understand exactly what you are signing up for.
One important factor to consider is the amount of money that is owed to your business. Some merchants will allow you to set up a limited limit on the amount that you can spend. Others will require that you pay the full amount up front.
Merchant account processors usually allow you to set limits. It is up to you to figure out how much you’re willing to spend. The one thing to keep in mind is that even though these vendors have a solid reputation for performing well, the merchant account program offers a low limit.
Keep in mind that most merchants find that the additional charges from a merchant account program are very nominal. In fact, most retailers will agree that those fees make up for the savings that they get from not having to pay the fees associated with accepting payment with a credit card.
There are some disadvantages to accepting payments through credit cards. Most of the time, the merchant pays very little interest on these purchases and therefore the payments can be small. On the other hand, these costs do vary greatly from one processor to another.
Choosing a payment solution for your online store can be a big decision. Once you know the advantages and disadvantages, you can make an informed decision about which option is best for your business.