Starting your own business means wearing a lot of hats. You're the salesperson, the craftsman, the customer service department, and the boss.
Is it really worth the trouble to set up a merchant account, just so you can accept credit cards?
Well, that depends. Everyone's business is different, so let's look at the pros and cons.
Setting Up A Merchant Account: Pro
1. If someone gave you an easy way to increase your sales by thirty percent, you'd be crazy not to investigate it. Well, studies indicate that accepting credit cards can increase sales by 30%.
Question to ask yourself: Can you take advantage of the tendency for your customer to buy on impulse?
2. If you have multiple products or services, you can also benefit from larger orders, which are statistically more likely when someone is paying with plastic.
Question to ask yourself: Do my customers want to order in bulk? Do customers want to buy multiple products in one transaction?
3. Running a one-man-shop means that people have to take you at your word that you're going to deliver. Being a verified merchant with major international banks gives an increased layer of credibility.
Question to ask yourself: Do I lose sales because I’m not seen as professional or ‘big enough’?
4. You can verify funds at the point of sale. Credit card transactions are automatically checked against the account balance, and with check funds verification, you won’t have a problem with bounced checks.
Question to ask yourself: Do I have a problem with bounced checks and chargebacks?
Setting Up A Merchant Account: Con
1. Refunds are more expensive. With a cash transaction, you refund the amount of money that was paid, and that's that. With a credit card transaction, the fees in the first payment, and then the refund, are the merchant's responsibility.
Question to ask yourself: Can I cut down my refund fees?
2. Customers can dispute behind your back. A disgruntled customer doesn't have to ask you for a refund; if they make a successful plea to their credit card issuer, you can get a chargeback, without your consent.
Question to ask yourself: Is my business at risk for illegitimate chargebacks?
3. With large purchases, you may be liable for chargebacks, for example if the customer defaults on their credit card bill.
Question to ask yourself: Will a card issuer come after me if the customer doesn’t pay them?
Of course, there is not one standard way to evaluate whether or not setting up a merchant account is right for you, every business is different: schedule a no-obligation free assessment with one of the representatives at Priority Payments Northwest. Click here to get started.