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Merchant Accounts for Small Businesses






Small businesses face special challenges, including finding credit card processing services that meet all their needs without busting their budget. The best way to do that is by finding a credit card processor who has plenty of experience providing small businesses with merchant accounts.

A merchant account is a business arrangement with a credit card processor that allows a merchant to accept payment cards from customers. The processor sets up the merchant with the necessary hardware and software, acts as a middleman for the authorization and settlement of sales transactions with the issuing bank and deposits the proceeds into the merchant's designated bank account.

It’s important to understand how a merchant account differs from a bank account. A business bank account is used to manage the financial side of opening, maintaining and growing a business. In fact, you should handle all business revenues and expenses through a bank account set up expressly for that business. Similarly, your merchant account should be kept totally separate from your business and personal bank accounts.

Just as there are many types of small businesses, there are many types of merchant accounts. Some small businesses need only one merchant account, but businesses that have diversified often need more than one.

For example, a retail merchant account suffices for a traditional storefront operation that deals almost exclusively in face-to-face, or card-present, transactions. If that business expands into e-commerce on the Internet, it will need an online merchant account to deal with card-not-present (CNP) transactions. It will also need an electronic payment gateway that can support a virtual terminal and virtual shopping cart.

Businesses that generate all or most of their sales in the field — service providers like electricians or plumbers, landscapers, food vendors — need a merchant account that gives them access to mobile or wireless credit card processing. Mail order or telephone order merchants, often referred to as MOTO, need a merchant account specifically set up for their needs.

If you’re just starting out in business and are new to credit card processing, be sure to start your search for a merchant services provider by asking for references from other business owners or local business organizations. When discussing your processing requirements with a provider, provide as much information about your business and your plans for it as possible. That way you will be assured of getting the right merchant account(s) for your small business.



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About the Author

Sarah Levy, Merchant Express
Hauppauge, NY 11788

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