Credit card merchant account processing can be confusing, expensive, and overwhelming for businesses, especially micro, small, and medium-sized businesses. If you want to open a credit card merchant account to accept credit cards, you need to know certain things when applying for a merchant account.

Let us first gain insights into some of the most important parties involved in the world of credit card merchant account processing.

Important Parties Of Credit Card Merchant Account Processing

• Cardholder: The customer who owns the credit card being used for purchase.
• Merchant: The individual business that accepts the payment. It establishes a credit card merchant account with a payment processor or financial institution to facilitate a smooth process of authorizing, processing, and settling credit card transactions.
• Card Associations: American Express, Visa, MasterCard, and Discover are popular names. These cannot be classified as banks, but as governing bodies that establish interchange rates. This association arbitrates between issuing and acquiring banks and is responsible to maintain and enhance their respective card networks.
• Issuing Bank: The cardholder's bank that is a part of card associations. Acquiring banks are paid by issuing banks for the purchases made by the cardholder.
• Acquiring Bank: The business's (i.e. merchant's) bank. This bank holds the funds of the merchant and acquires the money from a sale.
• Payment Processor: The credit card processing company that is entrusted with the task of processing and batching purchases made with the credit card. They act as intermediaries to the banks and card associations.

#1. How do Credit Card Merchant Account Services Work?

Simply defined, a credit card merchant account can be described as a financial account that helps businesses accept debit and credit card payments. The credit card merchant account provider holds a direct agreement with the business's bank account. Funds from payments made using the card get deposited into the business's bank account, and fees to be paid to credit card merchant account providers come out of that same account.

Once your credit card merchant account is set up, you can use it to process card payments, including card-not-present transactions. Fortunately, credit card merchant account processing is largely automated and, therefore, it doesn't require business owners to spend countless hours to understand the intricacies of credit card merchant account processing.

It takes only a few seconds for a merchant terminal to scan a customer's credit card and this initiates a series of lightning-quick communications between the payment gateway, the merchant account, the issuing bank, the acquiring bank, and the payment processor to approve the transaction and finalize the sale.

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#2. How to Successfully Negotiate With Your Credit Card Merchant Account Provider?

Are you interested in value-driven credit card merchant account processing solutions, but not aware of how to find the best deal? Try these steps to negotiate the best plan to serve the specific needs of your business.

When negotiating with your credit card merchant account processing provider, you should first ask for an interchange-plus rate quote to find out how much you will pay to the merchant account provider, and whether or not you're being billed fairly. Secondly, you should try to secure better terms to reduce costs for your business. To get started, you must carefully all service terms and conditions to understand the rates and fees you are paying currently or expected to pay soon. You should also research and collect information on the fees and rates offered by other credit card merchant account providers to gain leverage during negotiations.

If you have a strong credit history or if your transaction volume is significant, you can use these factors to smartly negotiate for more favorable terms. Similarly, you can obtain proposals and quotes from other credit card merchant account providers to incentivize your current provider to improve or match their offer.

If your business has experienced changes or growth in transaction patterns lately, you can request a rate review from your current credit card merchant account provider to adjust rates based on your current business profile. You can even use your positive or long history with the lender as leverage to inquire about any special incentives. Lastly, you should be prepared to walk away if things don't go your way and you have viable alternatives on hand.

3. Why Merchant Account Fees Are a Solid Investment?

One question that you may now be considering is whether or not it's the best time to implement credit card merchant account processing. After all, signing on for a credit card merchant account does cost a fee for every single transaction and every time. Should you really be sacrificing a percentage of your revenue (even though small)?

Let's talk facts! Today's tech-savvy consumers prefer to pay with debit cards, credit cards, mobile wallets, and other advanced forms of digital payments. The percentage of people using cash to pay for products and services has gone down significantly. The implications are clear. If you aren't accepting online payments just to avoid credit card merchant account processing fees, you can lose a big chunk of your existing and potential customers. Moreover, these customers will turn their back on your business and switch to your competitors. That's not something you want, right?

By choosing a credit card merchant account, you can deliver unmatched comfort and convenience to your customers when they have to pay for your products and services. This, of course, broadens your customer base and improves profitability rates. Furthermore, accepting card payments adds a certain level of professionalism to a business by signaling to customers that the business is committed to offering convenient and modern-day payment options.

Also, a credit card merchant account allows you to explore new markets and opportunities beyond your local geography. If this is not all, credit card merchant account solutions are designed to protect the sensitive personal and financial information of customers, offering a secure environment for transactions.

Conclusion

There is no denying the fact that the benefits of increased customer trust, streamlined operations, and more convenient payment options offered by a credit card merchant account can contribute to long-term success and growth for businesses.

This is primarily because merchant accounts tend to streamline the otherwise time-consuming and complicated process of accepting digital payments, resulting in improved customer satisfaction, shorter checkout times, and overall better service. Also, the out-of-the-box reporting and analytics tools can be accessed by you to gain insights into sales trends, customer behavior, and other valuable data to make informed business decisions, proactively identify the challenges ahead, mitigate risks before they trouble your business, and optimize operations.

Interested in learning more about credit card merchant account processing? Browse the free information throughout our site or contact us at WebPays to discuss your business's specific needs.