Make Money Online - Know Your Merchant Account

In this kind of economy, almost everyone is trying to find a way to make money online. Some people are fairly successful. For newcomers to the Internet, or for those who have never done much buying on the Internet, it's important to understand what's involved, especially as a new business owner. Here are 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. These accounts can be very costly. These hefty fees can take a large chunk out of profits at month's end. Remember when gas stations offered discounts for cash? That's why! Credit card processing charges can be tough. American Express is usually the worst, which is why it's hard to even find a store who will take an Amex card any more. They might do a lot for the customer, but they do nothing for the merchant other than offer services many of us don't even need. You can be charged from 2% to 9% on average for each sale you make. And that's just the beginning!

 

3. These companies aren't at all concerned about the success of your business or your overhead. They are indeed concerned about their own success, and in order to guarantee their futures, they think of every possible way to assess charges and fees that are totally insane when it comes to logic. Look for something that talks about early termination; you might get stuck in a multi year contract without knowing it.

 

4. Look for things in the agreement that talk about automatic checking account debits and charges. They already have your checking account information because that's where they deposit your earnings. Just make sure they don't plan on charging monthly maintenance fees or anything else they can conger up.

 

 

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 can take over a week in some cases to actually get paid! If you're used to using PayPal, forget those days!

 

7. Unfortunately, here is one you learn the hard way. If a customer believes they have been overcharged, or decide that they want their money back - even if your site explicitly says no refunds, no guarantees, and all that - you will log on to check your bank account one morning to find that you are either over drawn, or there is money missing. Why? Because your Merchant Account provider automatically sides with the customer. He doesn't ask you questions first; he simply takes the money away to give to the customer! YOU then need to spend sometimes months sending in paperwork, and going through mediation services (usually at your expense). In the meantime, your money is gone and the customer has the product or you have fulfilled your contractual obligations in some other way. Your chances of getting your money back are very slim.

 

Realize that while your goal is to make money online, not all of the terms and conditions of your merchant account agreement are conducive to this. Please pay close attention to the fine print before signing on the dotted line.

 

 

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