Online Merchants Account

An Online Merchants account is a basic necessity when setting up an e commerce web site on the Internet. It

is impossible to make any type of product purchase from a website unless the website has a online merchants account integrated into it regardless of the form. Unlike the early days of the Internet, today there is a vast variety of equipment and software available to the merchant for integration into his website for accepting payments and credit cards from customers. One aspect that needs to be considered before choosing a online merchants account is your website, the type of shopping cart that you’ll be utilizing, and where your customers are located.

You can apply for and receive a online merchants account from your local bank, an online presence, or simply utilize a Google checkout merchant account, or a PayPal merchant account. The last two options give you the ability to get up and running quickly without the usual high-end fees associated with software or physical equipment that is often associated with a online merchants account. Both Google and PayPal have integrated shopping carts that will seamlessly interface with your website and provide you with everything that you need to get your commerce site up and running. This may be a good choice for the beginner or newbie and allows you to get in to business at a much lower price point. As little as five years ago virtual terminal software was being sold and often times least for his much as $1,000. There is absolutely no reason to lease equipment for your online merchants account with todays multiple options available.

Caution must be taken when applying for a online merchants account and you must do your due diligence to make sure that the provider is legitimate and is associated with a high end bank. Merchant processing and the ability to accept credit cards is $1 billion a year industry is rife with fraud. This usually occurs when a merchant account provider entices a merchant with high-end equipment and gets him to sign a 2 to 3 year lease on  equipment in effect inflating the price for that equipment anywhere from 3 to 5 times what the equipment is worth. With the influx of new merchant processing equipment and companies it is imperative that you shop around to get the best possible deal not only on the equipment but on the interest rates associated with that equipment and your new online merchants account.

When shopping for a online merchants account keep in mind that you are in the power position and that the merchant provider seriously want your business as they make money when you make money. Very few people know that every time somebody swipes a card in your store the merchant provider that set up your account  receives a percentage of that charge. It is an extremely lucrative business and there are a lot of unscrupulous providers out there that are looking to sign up as many people as they can so they can turn over their portfolio of online merchants account and sell them to the highest bidder.

If your website is your only means of processing transactions than you would use what is called a virtual terminal, which is a software based interface to your online merchants account. The virtual terminal gives you two options in regard to processing a clients purchase. The first option is integrated into the website and the shopping cart and does everything seamlessly and automatically without any action on your part. The second option is the virtual terminal which gives you the ability to log into your computer and do refunds or do manual charges from information that has been submitted from your website. This is a time-consuming aspect of the processing, but if you’re in a situation where you often sellout of your stock you not want to process a credit card if items are not on hand as you are required to ship within a certain date by your merchant provider bank. Make sure when shopping around that your online merchants account has the virtual terminal option included.

When setting up your shopping cart and virtual terminal interface associated with your online merchants account you have several different options in regard to capture and processing credit card information. You can do a full capture and process which takes a credit card information and submit it to the bank at the end of the day and send you information in regard to what was ordered and gives you shipping information you would use this configuration when you have your items in stock and ready to go. So at the end of the day you would print out a order form, package and send all your items out the following day. The second option would be just to capture the credit card information only and what the software usually does is run a very small charge to see if the credit card is valid. It then keeps all the information and when your stock arrives you have the ability go in your virtual terminal and complete the transaction which will allow you then to ship out the product to your customers.

Your online merchants account virtual terminal that is integrated into the shopping cart also gives you the additional features of fraud protection which varies from provider to provider with the most basic fraud protection  called AVS or address verification system. The AVS is standard in most online merchants account setups currently. The system takes the credit card information and correlates it with the shipping information to make sure that the shipping address and the billing address is identical all lies it will show a throw up a red flag there are many other different types of fraud protection that you can add onto your package and if your website sells high-end items is extremely important to use as many fraud protection modules as you can afford. Many online merchants account owners do not realize that if an item is purchased with a stolen or fraudulent card and you have shipped the product, and the cardholder discovers the fraudulent charge the first thing the merchant bank will do is seize the money from your bank account until the transaction is cleared up. So basically the merchant is the one that loses if he does not do his due diligence in regard to fraud protection. With criminals becoming more sophisticated by the week it behooves the business owner to make sure that he stays one step ahead of the criminal by utilizing state-of-the-art fraud protection system on his credit card system.

Online Merchants Account and Fraud

Another important factor to keep in mind when dealing with fraud in Internet transactions utilizing your online merchants account is that if you’re charge back rate is above a certain percentage point in your merchant account,usually around 2%, your bank has the right and will shut off your online merchants account without notice, which can be devastating. And if your website lives and dies by those transactions and you lose your online merchants account due to high charge backs,you are for the most part lying dead in the water because of your inability to process those transactions. And if you do not follow up and provide the bank with all the information they require, you not only run the risk of losing a merchant account of being placed on a black list that is circulated throughout the banking industry that will keep you from getting another merchant account. It is a misnomer to thank that once one account is shut off you can simply go to another processor and get another merchant account.

It always surprises people when trying to acquire a online merchants account how important your credit rating factors into the situation. The bank will due a credit check and will give you your online merchants account based on your credit rating. Most people do not understand that when you process credit cards and you settle at the end of the day the bank in essence is giving you a line of credit. And if for some reason you are in a high risk line of business a large percentage of your charges are fraudulent and you have been given money that is not rightfully yours then the merchant bank will attempt to retrieve the money. So if someone has a lower than average credit score it will be difficult to find a online merchants account provider that will give you a reasonable line of credit. The only other option for an online merchants account utilizes a hold-back or a roll over where the merchant bank keeps a certain percentage of your transactions on a daily basis as a basic line of credit protect them from any losses. Depending on your credit line and your type of business percentages or rollovers could be anywhere from 5% to 25% that constantly roll over on a monthly basis and basically means that the bank will be keeping 25% of your profits or sales until you establish yourself as a reliable online merchants account owner.

Keeping Your Online Merchants Account Secure

And much like credit cards your online merchants account will be watched on a daily basis and if you maintain a good standing with relatively few charge back or refunds over a period of months or years the bank will increase your online merchants account line of credit. So if your merchant account started and you’re only allowed to process $5000 a month and you maintain a good relationship with your merchant account provider over a period of 6 to 12 months your line of credit may be increased to 10,000 a month or more and will increase proportionate to your reliability and processing history with that merchant provider. The bottom line is once you obtain a online merchants account it is extremely important to treat that account as gold because they are far easier to maintain than they are to get if you lose it.

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