Merchant Account Articles
How to get your own Merchant Accounts cheap! And some other
alternatives for inexpensive ways to start accepting credit cards
online
It is absolutely critical to have a
merchant account so people can buy your product or service with
their credit card. There are however, a couple of different ways
to this as well:
Details of #1: You can get your own Visa/Mastercard/AmEx/Discover
accounts with a local bank.
If you have a very good relationship with your
bank, and they don't require a security deposit, it is best
to get the merchant credit card accounts through them. Because
some banks only deal with two out of the four major credit card
types, you may have to deal with two different banks to be able
to process all four major credit card types (usually one bank
will have Visa and Mastercard, and another will have AmEx and
Discover).
The problem with local banks is they are
set up to serve retail stores and not mail order or Internet based
businesses so they either charge a very high "discount rate" or
require a very large security deposit (between $5,000 - $10,000).
For those that don't know what a discount rate is, this is the percentage
you pay on each transaction for the privilege of using their credit
card services. In other words, if you have a discount rate of 2.5
% and you put through a sale of $100.00 you will only receive $97.50
and $2.50 goes directly to the credit card company.
Details of #2: You get Visa/Mastercard/AmEx/Discover
accounts through a broker (these brokers are all over the country)
Going through a broker is my personal
preference. It is usually very easy to get approved, there are no
security deposits required, and they can get you a great discount
rate. I personally recommend a company called Total Merchant
Accounts.
They are Internet based and you can apply
directly online. They specialize in getting credit card accounts
for online businesses (even adult oriented sites). They have a 98%
approval rate. Even if you have been bankrupt, chances are that
they can probably get you approved. We have had great success and
I highly recommend them. They charge a $125 application fee
(all brokers charge a fee to set you up this is how they make their
money don't worry, it is fully refundable if you are declined).
Some others charge as much as $400.00.
The only other expense will be that you
need a terminal, software product, or web-based software (whatever
you decide) to process the credit cards (yes, this software will
process the credit cards in real-time, all automatically, just like
my order system does that I explained above).
You can buy this outright for about $900.00,
but you can also lease it from them for about $40 a month
(this is what we do and this is what I recommend you do).
You should be able to get a discount rate of 2% to 3%. So basically
you get merchant accounts for $125 up-front and $40 a month. This
is very cheap. If you plan to do business online, this is the best
way to go. What is $40 a month if you plan to be generating thousands
in sales each month?
If you don't want to use Total Merchant
Accounts, there are literally hundreds of different brokers
out there. However, be careful as there are a few that will take
your application fee and give you the run-around. We recommend Total
Merchant Accounts, as they specialize in online and home based
business and we have used them for years with great success (plus
they will bend over backward to help you). Click
here for their online application form.
This form is not a "formal" application.
It goes to Ed Freeman at Total Merchant Accounts (which is
the "broker", not the "bank"). This is to help him understand what
type of business you are in and a little about your company (so
he knows the best way to fill out the formal application that goes
to the bank for approval).
Just fill out this "pre-application form"
at the URL above as best you can (if you leave a few fields blank,
don't worry, the bank will never see this "pre-application form").
Once Total Merchant Account receives your pre-application
by email, they will contact you within 48 hours to go over some
specifics and get out a formal contract to you so that they can
set up the details with the bank. It is super easy and takes almost
no time at all. I highly recommend them.
