Small business merchant account

A small business merchant account is that account through which the credit card transaction can be done. The transaction of the credit card can be done either online or offline. Thus the money is not exchanged in the physical form while the time of buying and selling.

Later on after the authenticity and the viability of the credit card is being checked by the financial institution issuing the credit card and then the money is being transferred to the account of the merchant. These merchant accounts are very much in vogue these days.

Importance of merchant account for small business

Generally the customers these days do not wish to carry money in the physical form. Thus they love to make transaction through the credit cards. The credit cards make the process of handling the finances much easier and safer. Thus it is of prime importance for every type of businessman to hold a merchant account. Especially the entrepreneurs of the small business merchant account if hold the merchant then they widen the spectrum of their business. Since they increase the options for the customers to make payment thus they will start receiving varied range of customers. Since the working capital of the small business organizations are not too high thus the infrastructure is not of the superior quality. For this reason they should make every effort to make the target customers at ease with their process of transaction. Merchant account comes very handy for the small business organizations to attract the customers. Thus every small business account should avail the option of opening a merchant account.

Mode of operation

The merchant accounts are very popular these days more so with the small business organization holders.

Thus it is very important for the entrepreneurs to get acquainted with the methods of functioning of these merchant accounts. First the customers are asked about their choice for the type of transaction. Once the customers select to make the payment through credit card he is guided throughout the whole process of transaction. The primary step in the process of transaction is to direct the customer to the slot where they can enter their credit card information. It is of prime importance that the safety of that slot is maintained. Once the customer enters his credit card in the slot it immediately shows whether the transaction could be proceeded or not. This is very important because the validity of the credit card is being checked then and there only. The details of the credit card get stored in a very safe and secured store. This information on the credit cards is later on passed on to the financial institution issuing the credit card. The financial institution then checks upon the authenticity if the information furnished by the credit cards. Then they check the availability of the funds in the account of the customer. After completing this process the financial institution finally transfers the money in the account of the merchant.

Types of merchant account

The small business merchant account generally opened by the small business organizations are of two types. The type of merchant account should be chosen in accordance with the need and requirements of that business organization.

1. Card present account - this account is availed by those business organizations that have got a retail store. When the customers are present physically with the card in the store of the merchant then the transaction is done through the card present account. This account is lesser risky than the other one and so attract more charges than the other one.

2. Card not present account - this account comes in use when the customer does not present the credit card in a physical format. In this case the cardholder is providing with the details of the credit card and making the purchase. This type of transactions involve greater amount of risk than the other one thus it attract lesser charges than the former one.

Various processing methods

The credit card can be processed through various methods. The choice of the processing unit should be done keeping in mind the nature of the business one is organizing and the basic requirements of the company. The service providers give various options.

1. Telephone - this ideal for the merchants who are located at any remote location. It is one of the most popular devices with the small business entrepreneurs. The telephone keypad can be installed very easily and also very handy to use.

2. Terminals - this is basically meant for the stores located at the locations, which are more posh. In this the credit card is needed to be swiped or manually enter the information of the credit card. There are many well-designed terminals available in the market that can match the ambience of the posh store.

3. Point of sale software system - this specifically designed for the business organizations, which are small in nature and lack resources. There is software, which work as a point of sale. Thus it can be used in the computer that is kept for other purposes.

Finding the service provider

It is very essential for the small business merchant account organizations to find the right kind of business provider. While deciding upon a business provider it is very important to consider the cost that will be incurred as the working capital of these companies are not very huge. It should be kept in mind that these service providers must be entitled to accept the credit cards of all the major brands. If this is ensured then the range of customers received will be broadened. The entrepreneur selects the best plan available with the service provider. For this purpose the small business holders should surf through the market and make the choice with utmost discretion.

Advantages for the small business organizations

The merchant account has been advantageous to the small business organization.

* It increases the selling power as it makes your store more accessible to the customers as they can make purchase through phone and Internet.

* The transaction through these accounts is processed daily and even the payment is received soon.

* The monthly financial statements, which are very simplified and comes at regular interval helps to keep track on the finances.

The small business organization can opt for this option to enhance business but should do that utmost discretion.