Looking for the right Internet Merchant Account (IMA) can be a daunting task.
When making the move to ecommerce your business bank may seem like the most natural place to start for a merchant account but it is highly likely that they will not help you, unless you have around 2 years trading history behind you.
However payment service providers like PayPoint.net cooperate with many banks and can apply for one on your behalf, making it much more likely that you will be accepted and removing the task for you. They can also negotiate much better rates for your account.
Still, shopping around is not easy, so we’ve put together six main things you should look out for, before choosing the best option.
1. Acquiring rates and fees
This is an obvious thing to consider. Normally you will need to pay a monthly fee to an acquiring bank for your Merchant ID. Other charges include acquiring fees, which represent a percentage point of each transaction value, as well as the authorisation fee charged per sale. All of those may vary depending on what type of card was used.
2. Can the rates be reviewed?
If you have little trading history, or perhaps the nature of your business can be deemed high-risk, then your initial rates will most likely be higher than average. That is why you should ask your merchant account provider whether these can be reviewed 6 and 12 months down-the-line. It is possible that you could then qualify for a lower rate, saving you money on each transaction.
3. Read T’s & C’s
Each provider will have individual terms and conditions, so be sure to read those before agreeing to anything. They could affect important things, like the length of your contract and the amount of technical support you can expect to be included as standard in your account.
4. Essential documentation
Merchant providers can ask for a range of documents, such as business registration files, confirmation of domain ownership and any supplier agreements you may have. All these are needed to ensure that your business meets their requirements and will vary slightly between them. In the first instance ask for a full list of necessary paper work and have this ready on application to speed up the process.
5. Settlement terms
These are important, as they determine how quickly any funds will be settled from your IMA into your business account. Some providers do this within 3 days, while others wait as long as 4 weeks to clear any money. Most will hold the means for a certain period, in case there is a chargeback, so familiarise yourself with these, as they could be crucial to the future of your business.
6. Security requirements
Risk of fraud linked to online transactions is one of the main reasons why internet merchant accounts are difficult to obtain. MasterCard and Visa card schemes should be able to provide you with security guidelines and minimum requirements your website has to meet.
One of the major prerequisites is that your payment network is Payment Card Industry Data Security Standard (PCI DSS) compliant. In fact this is now required of all businesses processing payments online. Also, if you maintain the payment pages on your own server, then you will be liable for any security breaches and could have the ability to accept online payments taken away from you. It is crucial that you are fully aware of what you are taking on, if you go it alone.
With many different providers competing for business ensure to follow all of the above to get exactly what your business needs. Learn about the risks and opportunities that come with each option and choose the one which best suits what you and your company do.