A business, even a small one, should be equipped to accept credit card payments. That part is not in question. With the growing popularity of cashless transactions, not accepting credit cards means losing out on sales and profit. But does that mean you need to open a merchant account with your bank?
Not necessarily. We’ll tell you why and we’ll also tell you what other options are available for small businesses, new businesses, and independent contractors.
What is a merchant account?
Simply put, a merchant account is an account that a business needs for processing debit and credit card payments. The merchant account provider, most often called a payment processor, also provides the equipment and infrastructure needed to set this up.
When a customer pays using a debit or a credit card, the payment is taken from the customer’s card and transferred directly into the merchant’s bank account.
Merchant services providers also throw in a lot of value-added perks and services to make them more attractive to businesses. This varies per provider but it typically includes:
- A dedicated account manager
- Access to tech support and customer service
- Point-of-sale system
- Virtual terminal
- Loans and lines of credit
Sounds great so far, right? But before you start applying, you should also know that a merchant account also comes with multiple fees, some of which might not be readily obvious on the contract. You might end up feeling blind-sided with all these “hidden” fees. Again, this varies per provider but among the most common types of fees would be:
- Application fee
- Setup fee
- Hidden “Downgrade Fees”
- Transaction fees
- Equipment rental fee (credit card terminal, etc.)
- Early contract termination fee
These fees may be negligible for a business dealing with a very high volume of transactions day in and day out, but for a new business or a small business, these fees could hurt their bottom line.
There’s also the matter of getting approved. Because the merchant bank is essentially assuming the risk for chargebacks and fraudulent transactions, they often have very strict vetting processes.
If that’s the case, what are their options? Where can they go to get the same service and benefits?
When it comes to fees, Payment Pilot offers the lowest rates guarantee and a transparent pricing strategy. We know that every cent counts for startups and single owner-operators. That’s why we charge only for the services that are used. We don’t charge monthly fees or any other miscellaneous fees. We also believe in winning and keeping customers through great service and fair pricing, not restrictive contracts. We don’t require long-term commitments from businesses that sign up with us.
All-in-all, a merchant account is great as it gets the job done and it comes with many benefits. But you don’t need to go to a bank to get one.
Are you ready to take your business to the next level? Take advantage of our low rates. Reach out to Payment Pilot and let’s get started!
