With the advancement in technology and popularization of the internet, customers are no longer using cash and checks for the payment of goods and services. Consumers prefer making payments with debit and credit cards, via text, on the Internet, etc. This change in the marketplace has led to an increasing need for merchant accounts.
What then is a merchant account?
A merchant account allows businesses or organizations to accept remittances in multiple ways, basically debit or credit cards and other online deposit systems. For an amount to be processed through a merchant account, the customers’ payment information needs to be collected, which can be done in three ways:
- By card machine
- Over the phone (you need a virtual terminal, which is a secure web page accessed via a web browser into which customers card details are inputted).
- Online (equipped with a payment gateway).
The importance of a merchant account to a business owner cannot be overemphasized. Below, we have included some reasons why they are so important:
1. Enhanced security:
If you want customers to contunue buying from you, you must ensure that their financial information and funds are safe. Research has proven that half of all online consumers or credit card users are fearful of data theft. With the high security linked with merchant accounts, especially high-risk merchant accounts, you can be confident that all your customers’ financial data is secure. Knowing that their data and money is safe will put your customers’ minds at rest. They will be keener to keep sending business your way.
2. Multiple currencies:
If you have an online store, you will be dealing with clients from different countries using various currencies. This is an added benefit for you because your merchant account will enable you to accept settlements from all over the world. Your customer base will subsequently increase, which will ultimately mean more sales and profits.
This will also improve your international clients’ online shopping experience and make it easier for them to pay for their desired goods. This means that all you need to focus on is making sure they receive what they paid for on time and in good condition.
3. Increased sales:
According to research by professors at M.I.T, customers tend to make more impulse buying decisions and spend more money when using a credit card or making a payment online, compared to when paying they use cash. Another study by Intuit Incorporated found that 85 percent of small businesses that began accepting cards and online payments experienced an increase in sales.
When you take your company from a cash-only business to one that accepts cards and electronic payments, your potential client base broadens tremendously. The more clients you attract, the faster your business will expand. Put simply, a merchant account helps you reach your commercial goals and objectives much faster.
4. Improved customer satisfaction:
Consumers today want to enjoy flexibility, speed, and convenience. Providing your customers with different settlement options gives them control over how they spend their funds. You will also be able to sell to a much wider range of customers and prospects. A prospect is a consumer who is likely to turn into a customer. If a prospect sees that everything is easy and straighforward, he or she will feel more inclined to buy something from you.
5. Improved money management:
When you make use of your merchant account for your business, you will be able to organize and manage your cash more easily. You will get a detailed statement of every transaction, including settlement modes, their currencies, and much more. This will make it less complicated for you to keep track of your operation. It will also help you to calculate your taxes and keep track of your payment history without any hitches.
A merchant account does much of the bookkeeping for you, which gives you more time to focus on making your business more successful.
6. Avoid bad checks:
With a merchant account (electronic modes of payment inclusive), you won’t have the nuisance and disappointment of having to deal with bounced checks. It is the best way to make sure that any payment is a proper one, i.e., that you get paid. You can also receive reimbursements for recurring services that you offer on a repeated basis.
The Internet has changed how we work, play, study, spend our free time, and shop. Most consumers today rely on the internet for shopping, their bill payments, and even bank account management. Having a trustworthy merchant account helps you receive payments online, provide virtual invoicing, set up reminders for payments, and most importantly, take your business where you want it to go.