How do you open a credit card processing merchant account? Of what importance is a merchant bank account to a small business? What are the challenges involved with opening and operating a credit card processing merchant account? If any of the questions asked above interests you, then please read on as I highlight the pros and cons of obtaining a credit card processing merchant bank account.
One of the easiest ways to increase your sales in business is to offer your customers multiple payment options; and one of such is a credit card option. Some marketers and small business owners enjoy increases of 10% to 30% in sales when they get up with a Visa/MasterCard merchants account. Others have reported increases up to a whopping 100%, or even more.
The positive impact of having a credit card processing merchant account is more profound on those who are into direct marketing or those who run a business online. If all of your sales are made by mail, you can expect to up your total sales by at least 10%; and more likely 15% to 30% simply by offering the credit card option. If you plan to use the telephone a great deal as a marketing tool, offering a credit card buying option could double or triple your sales.
Now why does offering a credit card buying option increase sales? How does it add to the bottom? Credit card buying is seductive. Many people like the option of buying something today that they won’t have to pay for until later. Also, most consumers tend to spend more using their plastic, than when they’re writing a check, or paying cash.
Aside this, there are many other good benefits your business can gain from securing credit card merchants status and offering credit card buying options to its customers. Here are some of them.
Seven Reasons Why You Should Become a Credit Card Merchant Account Holder
1. People with credit cards are more affluent than those without plastic. They can afford to spend more money.
2. They tend to be better “credit risks”, if you want to sell “open account.”
3. Overall, they buy more by mail than those without cards.
4. You cannot effectively sell from commercials on radio or TV without offering credit card purchasing. Visa and MasterCard are by far, the cards most consumers have.
5. They often will make credit card purchases even when they are short on cash, or when their checking account balance is low.
6. You can sell on installments, obtaining permission to charge the buyer’s card on a monthly basis.
7. You can ship goods with the secure knowledge that payment has been secured before shipment is made.
The pros and cons of opening a Credit Card Processing merchant account
By now, you’re probably convinced that accepting credit card orders is a good idea. But how can you obtain a credit card merchants status? Truth is; it’s not always a piece of cake. In recent years banks have been playing hard-ball with many business people, especially anyone doing business by mail. It’s the same old story, a handful of mail order crooks have almost totally screwed-up a good thing for honest dealers.
The major credit card companies have told the banks to be very, very selective in issuing merchant accounts to mail order sellers and home business operators. Just because a few scum-bags have ripped off some banks and run off with the money, your local friendly banker may not be too “friendly” when you tell him you want a merchant account.
It has become increasingly more difficult for mail order sellers to secure a merchant account, and if you only sell by mail; then consider setting up for Visa and MasterCard processing. Don’t be discouraged by the bank’s nonchalant attitude towards small business owners. WHERE THERE IS A WILL THERE MUST BE A WAY!
The best way to obtain your credit card processing merchant account
Although your banker may have already told you that they “cannot” accept you for a merchant account, the simple, unvarnished truth is that he/she can. Visa and MasterCard do set some rigid guidelines for their affiliated banks to follow, but ultimately the banks must approve or disapprove each application.
Excuses concerning “doing business by mail”, “operating a home-based business”, “not having a long business track record”, are just excuses! A somewhat polite way to tell you “no”!
Now how could a mail order businessman, (books, home-study courses, etc.) that conducts his business exclusively in his home get a Merchant Account? He happily processes credit card orders for his customers with full knowledge and cooperation from his bank. How did he do it? He never stopped asking for what he wanted. Well, this was how he did it.
When his own bank refused to even consider him for a credit card processing merchant account, due to the fact that he was in mail order, and also doing business from his home, he beat path to several other banks. The first four banks he visited also said “no”, (2 were large institutions, 2 mid-size), so he decided to try some smaller banks. Guess what? The very first bank he went to said “Maybe”.
They asked him to transfer his account to their bank, so that they could “monitor” it for six months. He told the bank official that he would consider their proposal, and the proceeded to another small bank one block up the street.
He liked what the second small bank said. They said “Yes!” All he needed to do was establish a checking account with them and maintain a modest $1,000, business checking account balance. This he quickly did!
He is not unique. But he was very persistent and kept asking for what he wanted, and you must also. Probably the two best ways to get a merchant account are:
1. Keep pestering your own bank about granting you charge card privileges, until they agree to do so.
2. If your bank outright refuses, make a list of all banks in your immediate area, putting some special attention on small banks. Next, get out a pair of your most comfortable shoes and get to it! Ask…Ask…Ask..Ask.. Ask! You have nothing to lose, and much to gain by being persistent, and by constantly asking for what you want (that’s good advice in all areas-business and
Personal life).
NEVER GIVE UP!
Although this article gives you various sources that might be able to help you with your credit card processing needs, the main message of this article is “NEVER GIVE UP” Never take “NO” for a final answer. Keep asking for what you want! Those who keep asking and seeking, usually get what they want.
Written by Ajaero Tony Martins
