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Do you need an inexpensive merchant account?

Posted by Alex Neir on Mon, July 12, 2010 @ 04:07 PM
Do you need and inexpensive merchant account? inexpensive merchant account Do you need and inexpensive merchant account for your business? What defines an inexpensive merchant account? Is the account an inexpensive merchant account if the rates and fees associated with the account are as the lowest they can be? I certainly believe that is one factor. What about customer service and reliability? How does the reliability of the account and available support factor into the “cost” of the merchant account? When growing your business it’s important to analyze the costs and benefits associated with any strategy intended to increase your bottom line. The addition of an inexpensive merchant account or the substitution of your current account with an inexpensive merchant account can be a very effective way to increase sales while keeping overhead low. Some of the benefits of an inexpensive merchant account include:
  1. Convenience and immediacyTaking your products and services to the internet allows your customers to acquire your offerings at all hours of the day or night.
  2. Options and value - All things equal if you are selling the same products as a competitor and provide more options for payment your store is perceived to offer more value.
  3. Higher average ticket – According to Dun and Bradstreet it is estimated that customers spend 12% to 18% more when using a credit card for payment.
  4. Minimize bad debt – Reduce the instance of bad debt through offering credit card processing. You know the customer has the funds to complete the sale as the authorization tells you before the customer leaves the store.
  5. Increased sales – Dun and Bradstreet estimate that the average business can increase sales anywhere between 12% and 35% thought offering credit to patrons.
Now that we have established some of the benefits to establishing an inexpensive merchant account let’s discuss the costs. With a typical merchant account there will be rates and fees associated with the various functions of the account.  Some of these rates and fees include:
  • The discount rate
  • The transaction fee
  • The batch fee (settlement fee)
  • AVS fee (address verification)
  • Customer service fee
  • Monthly minimum fee
  • Termination fee
  • Online account access fee
  • Etc

The costs associated with running or establishing a merchant account should be thought of in terms of recurring costs verses prospective (future) costs. The recurring cost of the account can be boiled down to a percentage of total volume processed and is known as the effective rate (ER). The effective rate of an inexpensive merchant account are the fixed monthly costs incurred to attain the benefit of offering credit. These costs are usually the main focus of a business when selecting a merchant services provider. I believe it is important to point out the potential larger prospective (future) costs that can result from selecting the wrong provider. For most businesses, the revenue from credit card sales represents a significant cash flow source. If this revenue source is interrupted it can put substantial strain on the business operations and can represent significant costs to the business. inexpensive merchant account Possible interruptions can result from any number of network issues very common in the processing industry. Interruptions are inevitable and the true costs associated with the interruption are determined by how long it takes to correct the problem. It is very important to select a processor that has a support staff that is available and knowledgeable in order to ensure merchant processing down-time is kept to a minimum. At Maxx Merchants our dedicated in‐house approach to the entire merchant service process is our mission. Our commitment to merchant customer support is of the utmost importance, leading to our industry high merchant retention rate. We are one of very few payment processors offering dedicated 24/7 technical support staff that are employees and not subcontractors. At Maxx Merchants we are able to offer you the ultimate inexpensive merchant account as your recurring costs (ER) will be very low and your prospective (future) costs are minimized with the best support in the industry. What does that translate for you? Increased profits!!

Please call us directly to get started (800)917-8026.

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