Whether you’re a start-up or an established business, at some point you’re going to be faced with the decision of how to accept electronic payments and whether or not to apply for a merchant services account. That can be a tough choice, as there are a lot of misconceptions surrounding merchant accounts, from the difficulty of approval to their usefulness to different kinds of businesses.
While some businesses find a way to get by without one, most companies will eventually come to the decision that a merchant account is the right choice for them, and with good reason. The alternatives that exist, while serviceable, aren’t ideal, and the benefits to be gained from a merchant account are hard to ignore.
The Alternative: Third-Party Processors
The first and most obvious alternative to accepting card payments through a merchant account is not accepting card payments at all. That’s a bad choice, and most serious businesses would never even consider not offering customers some sort of plastic option. The other alternative is third-party processors, and while these are a popular choice for some much smaller businesses, they’re not a good choice for companies doing any real volume.
PayPal is probably the most well-known example of a third-party processor. PayPal allows members to accept credit card payments, but those payments are processed through PayPal’s master merchant account, with the company acting as a middle-man. As with any middle-man, they make their money by tacking on additional fees. Those fees aren’t insignificant, and they make third-party processors fairly expensive on a transaction-by-transaction basis.
The Benefits of a Merchant Account
While a merchant account isn’t technically necessary to accept credit payments, compared to the alternatives, there are some major benefits to having one. They include both the financial benefits that a merchant account offers, as well as the less obvious, but equally important benefit of lending credibility to your business.
The first major financial benefit is that having a merchant account makes your business more accessible to your customers, and that can only be a good thing. With each new generation, cash becomes more and more obsolete, and card payments become more and more the norm. Your customers want to pay you with cards, and, generally speaking, when someone wants to give you money, you should let them!
The second financial benefit is that a merchant account is almost certainly the cheapest option you’ll have access to for accepting card payments. That doesn’t mean all merchant accounts and payment processors are created equal, and you should shop around very carefully when deciding who to sign on with. But compared with the alternatives, a merchant account is generally your most cost-effective bet on a per-transaction basis.
Perception is reality, and if a customer perceives your business in a negative light, there’s a good chance you’re going to lose the sale. When you accept payments through a third-party processor, it generally requires customers to be redirected from your website to the processor’s website. That can be a jarring experience in the middle of a transaction, and it can easily cause a customer to abandon their purchase altogether.
A merchant account allows you to accept secure, PCI compliant payments directly through your website, under your own familiar branding, and without any scary redirects. That’s the experience that consumers expect from well-established, reputable merchants, and it can’t be overstated how far it can go in reinforcing the trust between merchant and customer.
BAMS provides merchant services to thousands of businesses across the globe, and 98% of our client merchants report lower stress levels when working with a BAMS merchant account. That’s because we go out of our way to ensure your payment processing experience is as easy as possible – from getting your account set-up, to ensuring PCI compliance, to accepting payments, reporting, and beyond.
Contact us to find out how BAMS can help you get set-up with an affordable, no-stress merchant services account today!