As jobs are lost and the economy tanks further by the day, it seems the last bastion of possibility lies in making money online. And that might not be a bad idea for many people. If you are seriously looking for a way to sell products or offer your services, you probably need to start thinking about finding a merchant account. Not sure how? Pay attention to the 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 cost a tiny fortune between fees and surcharges. Make sure your read the terms and conditions and anything else that you need to sign. Seriously. The smaller the print, the more time you should spend reading it! Make sure you know what you will be charged in discount points. Don’t get excited – you aren’t getting a discount. Your are paying a percentage of your sales to the company(ies) clearing the payments. These points can be as low as 1.9% and reach highs of close to 6% or more. American Express has historically charged the most to use their card, which is why many retailers have stopped accepting 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. Because they have access to your checking account in order to pay you, they can also take away. Completely understand every possible fee and surcharge they can tack on. It’s all in that fine print! Look for standard monthly charges such as administration fees (what, you aren’t paying enough already?) and fees to send you paper statements!
5. While you have that contract in front of you, look for any kind of penalty they want to charge you for not using the account in a monthly billing cycle. For instance, if you process less than $500 worth of business through them, they might charge you $50 or so as some sort of punishment. (Like losing business isn’t enough to worry about!)
6. It takes times to get paid! Let’s say you sell a downloadable eBook for $12.95. It clears through your merchant account. When do you get paid? Depending on the bank you signed up with, it can be anywhere from 3 to 10 days! And don’t forget – you don’t get your $12.95. Remember those discount points? You could end up with less than ten bucks!
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 cash, we’ve got the inside scoop on e commerce account merchant online and power pay merchant accounts .
