Modern Payment Options
Now that we mentioned payments, let’s look at it from a business owner’s perspective. Today, consumers prefer payment alternatives that guarantee their financial safety, convenience, and ease of use. As a matter of fact, most of today’s generation prefers cashless transactions because they allow them to monitor spending and the records can always be retrieved.
This is by far why credit card payments, mobile wallet payments, and online payments have become so popular in the first quarter of the twenty-first century. However, many business owners wonder how they can start accepting these modern methods of payment to attract more customers and keep them satisfied. If this sounds anything like you, you clicked on the right page.
Let’s look at various ways you can get your payment processing accounts up and running inexpensively.
1. Set up a Merchant Account
Whether you operate a brick-and-mortar store or run an online business, one thing is for sure. You might need one or several solutions for processing digital payment transactions. To start accepting credit cards, you will need a credit card processing merchant account. Online payments also necessitate getting an online payment processor.
Also called a merchant account, a payment processing account lets you receive money from your customer’s bank account to your business, so the transaction is completed. However, merchant account providers usually charge several types of fees, including set-up costs, monthly, and transactional fees. The folks over at PayFac would recommend vetting a payment facilitator based on the value they provide in addition to the savings they allow you. Some important factors to consider before picking a payment processing accounts provider may include:
- Transparent pricing
- Supported payment options
- Incredible support
- Payment processing duration
- Contract lengths
Basically, a merchant account serves as a holding account where pending cardholder transactions are kept. Once credit or debit card payments are processed and accepted, they are routed from the card-issuing bank to a merchant account. The money is then channeled into a company’s bank account.
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The functions of a merchant account and a business bank account are distinct. A business account is used to track costs linked to operations, such as rent. The sole purpose of a merchant account is to process credit cards.
2. Use a Good Payment Gateway
In payment processing, the payment gateway provides a link between the payment processor and the credit or debit card issuers, like Visa or American Express. In a nutshell, it serves as a link between your customer’s bank account and your merchant account. You’d be missing out on a big element of completing a financial transaction if you didn’t have a payment gateway. You would have all of the components necessary to move/receive money, but accepting payments from customers could be impossible without a payment gateway.
With this being said, merchant accounts can be linked to a payment processor using a payment gateway. The payment gateway can either be an in-house team or a third-party provider. If you choose to use a third-party payment gateway, they will need to communicate with the card issuer for transactions to be completed. Either option can be affordable or expensive depending on various factors, including the size of your business.
3. Accept Digital Payments like PayPal
As an online merchant, you can expect all sorts of customers, perhaps from different parts of the globe, depending on the scale and size of your business. Some of your customers will want to make purchases and pay using various forms of currency, including from online payment platforms like PayPal. The good news is that as a merchant, you have access to three different scalable solutions. You can set up a standard Merchant account, Advanced, or Pro.
There is no monthly cost with the Standard account. However, an additional 2.9 percent plus a $0.30 fee is charged per transaction. Notably, this fee is lowered to 2.7 percent, for in-person credit card swipes through the PayPal Here card reader. This card reader is also compatible with most tabs and smartphones. Moreover, you won’t pay a dime for PayPal money transfers to your bank account if you can wait for 3 to 5 business days.
4. Try Merchant Payment Solutions like Amazon
Amazon Pay offers a merchant payment solution like no other, thanks to its renowned flexibility. Based on your transaction volume, you could save massive amounts of money by using this solution. Despite the $0.30 fee for each transaction, the payment processing fees for Amazon Pay are as follows.
- 9 % fee per transaction ($10 and above)
- 4% per transaction for Alexa products
- 9% payment processing fees (for transactions outside the US)
5. Register a Fictitious Name
If you want to keep your business as a sole proprietorship or partnership but operate under a different name (a DBA), you’ll need to register your fictitious name with your city, county, or state before your bank allows you to create a business account. In many places, all you have to do is visit the county clerk’s office and pay a registration fee.
However, you might need to publish a notice in a local newspaper in some states. Fictitious name notices can cost anything from $10 to $100 to file. Corporations are usually not required to file fictitious names in most states unless they do business under different names from their own.
Setting up a payment processing account is often a daunting task to many business owners. This is especially true when it comes to the costs involved. However, it can be done without much strain if you know what to do and how to do it. The above few tips can help make the process less daunting and more affordable for you as a business owner looking to accept cashless transactions.