The internet has opened up a world of possibilities. The power of this virtual world has been discovered by innovative entrepreneurs, and now anyone with initiative can start a business with the least capital possible-time, computer, internet connection and a great product idea. These are categorized as small businesses online and as with all e-commerce systems, they require credit card processing for the payments of online buyers. This is where the merchant service providers come in.
What are Merchant Services?
Merchant services allow the business owners to process credit card payments for their online buyers. The core of the service is the merchant account, a commercial bank account with which you can route payment from the customer's bank to your bank account, through a credit card processor. Merchant accounts are also offered by financial institutions such as banks but these accounts are too costly, with expensive monthly fees.
The best services for small businesses are third-party payment processors and the Independent Service Organizations (ISO). The former are companies that already have merchant accounts. They send your credit card processing through it, taking care of the whole purchasing process from choosing the right shopping cart (with which the buyers can put the items they want to purchase) for the merchant payment gateway (a complex "passageway" wherein the credit card transaction is verified through the buyer's bank and card association authentication before the final approval of the purchase). Third-party processors also provide customer and billing inquiry services, all at a relatively small fee.
ISOs, meanwhile, are representatives of one or several of these third-party payment processors, offering credit card processing services through their established bank card relationship with card association members such as Visa and MasterCard, among others.
What Makes a Good Merchant Service Provider?
If you want to start your own online business, you have to shop for the right service provider that addresses every need of your business. The following are just some of the factors that you have to consider:
• How long has the company been in the field? Longer experience is always the best gauge of quality service.
• Does the merchant service provider dedicate itself to ensuring the privacy and security of the transactions and information? It is best to ask what measures the company goes through, to protect the delicate information they handle. Most of qualified and better-known companies, for example, use iSpyFraud, a fraud-detection software.
• How much is the monthly rate? Do not just take the rates and fees listed on company websites at face value. Research deeper, and you might unearth hidden fees. A good credit card processing company charges a low monthly fee and is transparent with its fees and costs as the service progresses. This is especially vital for small businesses that already have small capital to start with.
Currently, there is a myriad of merchant service providers eager to help online entrepreneurs. Hidden among them are scammers and frauds, eager to pilfer money from the not-too-well-informed such as newcomers in the small business arena. The best way to ward them off is to research and continuously educate oneself on the ever-changing dynamic geography of e-commerce.
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