In this kind of economy, almost everyone is trying to find a way to make money online. Some people are fairly successful. For newcomers to the Internet, or for those who have never done much buying on the Internet, it’s important to understand what’s involved, especially as a new business owner. Here are 7 things to know about online merchant accounts.
1. A merchant account is nothing more than a means for you, the merchant, to have your customer submit payment. They generally combine two separate functions and you might even have fees broken up on your monthly statement to show the fees you pay for collecting and processing money, and the fees you pay to get paid.
2. They can be very expensive. Read the fine print. Look at “discount points”. God knows why they call them discount points, because they have nothing to do with a discount. This is the percentage of the sale that you are charged for each transaction. These points average 2.5 to over 6.0 in some cases. They usually vary from bank to bank, but no matter what, American Express is always the most expensive – which is why many stores don’t take Amex cards.
3. Keeping reading those terms and conditions. Some of these online companies couldn’t care less about you and your company. They are in business solely to charge you every possible fee they can think of. Before committing, make certain you won’t be stuck with an early cancellation fee which can sometimes run as high as $500. Sales reps for these plans are notorious for lying through their teeth when asked about these fees. Read the agreement; it’s the only way to see what you’re getting.
4. Look for things in the agreement that talk about automatic checking account debits and charges. They already have your checking account information because that’s where they deposit your earnings. Just make sure they don’t plan on charging monthly maintenance fees or anything else they can conger up.
5. Let’s say you didn’t sell a minimum of $500 last month. You might see some odd and very high charges on your monthly statement! The less you make, the more they charge!
6. It can take over a week in some cases to actually get paid! If you’re used to using PayPal, forget those days!
7. And last but definitely not least, watch out for unauthorized customer refunds. Merchant accounts are notorious for listening to those crazy customers who will do anything they can to get their money back. You will find out at the worst possible minute that your merchant processor has refunded money to a customer without asking you for your opinion or for any documentation. Even if your website specifies “no refunds” it doesn’t matter! You can spend months trying to get through mediation, but rarely will you win.
If you really want to check out a merchant account, stick with well known processors.
If you’re seriously thinking about getting into the Internet marketplace to make your money, we have got the inside scoop on marketing and credit card processing .
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