Own a Retail Business? You Need a Merchant Account

Now that the New Year is upon us it's time to get the ball rolling and fulfill that lifelong dream of opening your own business. If you've ever wished to own a bakery, restaurant, knick-knack shop, book store, coffee house or all of the above there is one term you'll need to get familiar with: Merchant Account.



A merchant account enables businesses to accept and process credit cards, debit cards and in some cases electronic checks. It is nearly impossible, in this day and age, to run a successful business and not accept credit cards.

Think about it: How many people do you know that still carry cash?

Shopping for the perfect merchant account is kind of like dating. All credit card processors are not created equal and you want to find the one that is right for you. You'll need to do some research. There is a world of information online or you can ask retailers and business owners in your area.

We'll admit there is a lot to absorb when diving head first into merchant account services and credit card processing practices. Your best option is to go in armed with as much information as you can find. When looking at merchant account services feel free to call and ask questions to the customer service representatives. You'll want to compare discount rates, transaction fees, monthly minimums and terminal prices.

Discount Rates:

Discount rates for storefront retailers are usually cheaper than those of their online counterparts. Brick and mortar stores are considered less risky and therefore they have lower rates.

Transaction Fees:

A transaction fee is the flat rate you pay every time someone swipes their card through your credit card reader. Transaction fees are pretty similar across the board from merchant service to merchant service. However, you should never pay more than $.30 for a transaction fee.

Monthly Minimums:

In a round-about way monthly minimums can tell you how successful your business is. Every time a transaction is made and that discount rate is charged, the total is calculated. That total has to equal your merchant monthly minimum otherwise you will be charged the difference. A low monthly minimum is a highly desired feature.

Terminal Prices:

The price of credit card readers and terminals differ depending on their sophistication. Remember, you don't need anything really fancy. Choose a terminal that suits your needs.

You'll also want to ask questions about fraud protection, understand an ISO and if you eventually want to expand your successful retail business online, select a merchant service that also supports a payment gateway.

Yes, there are a lot of fees associated with merchant accounts, but in the end it pays off. You are turning away less business because you can accept your customer's choice method of payment.