Merchant Account Services is pleased to announce we have simplified the search for shopping carts. We have compiled a list of ecommerce software and organized it by type for you. We even included the price as well. You can view the list in our Resources section or directly on our shopping carts page.
Archive for May, 2006
List of Ecommerce Shopping Carts
Tuesday, May 30th, 2006Do A Test Transaction
Friday, May 26th, 2006This may sound obvious, but you would be surprised how many new merchants don’t do this. But once you have established a new merchant account you should run a test transaction for $1. Why? Because:
- You want to make sure your credit card terminal works properly
There’s no better way to make sure your equipment is setup properly then to use. Make sure it communicates with your processor successfully and prints out a complete receipt for you.
- You want to make sure your credit card terminal is setup properly
Is it your business name at the top of the receipt? Is it spelled correctly and have your correct address and phone number?
- You want to make sure you receive your deposits
This is the best reason of all to so a test transaction. You want to be sure that the $1 transaction you processed actually gets deposited into your business checking account. If there is an error somewhere that is preventing you from receiving your funds, you are better off discovering this by “losing” $1 rather then $1,000 (or more). If you don’t see that $1 in your business checking account within three business days or so, call your processor and see what the story is. You just might be saving yourself a huge headache and nightmare.
The Monthly Minimum Explained
Monday, May 22nd, 2006What exactly is the monthly minimum fee? Well, this is a fee which guarantees the merchant will be paying a minimum amount each month in processing fees. If a merchant’s discount fees do not equal their monthly minimum fee they will be charged the difference between the two in addition to their discount fees.
Example:
A merchant has a discount rate of 2.50%, a monthly minimum of $25, and a monthly volume of $600. The discount fees for the month will be $15.00 (.025 * $600). Because their discount fees are less then their minimum fee ($15.00 < $25.00) they will be charged an additional $10.00 as a monthly minimum fee ($25.00 - $15.00).
So, what is the purpose of this fee? Merchant account providers and their sales agents make their money by taking a very small percentage of every sale a merchant processes. Naturally this can be very lucrative. But, if a merchant is very small, they won't make very much money from them. So, to make up for this, they charge this monthly minimum fee. Then, when the merchant has a slow month, this fee is incurred and the merchant account provider still makes their profit from this merchant.
This fee is not required by Visa and MasterCard to have an account with them. Many processing companies offer merchant account with excellent rates without the monthly minimum fee. So, if you are shopping around for a merchant account and are told that you will have a monthly minimum fee, say, “Thanks. But no thanks”.
A Contract Does Not Mean Chargeback Protection
Friday, May 19th, 2006One common misperception when it comes to chargebacks, especially online, is that having a signed contract will protect you from chargebacks. This is mostly untrue. American Express will deny a chargeback if a merchant can provide a signed contract in which the customer acknowledges that the work was completed/product delivered and was satisfactory. However, Visa and MasterCard will not stop the chargeback even with this kind of documentation.
Visa and MasterCard’s stance on this is that they will not be a collection agency for merchants. But this doesn’t mean that you are out of luck on collecting the money you are rightfully owed. A signed contract is still a legal document and will hold up in a court of law. You will probably end up in a slightly protracted dispute but ultimately you will receive your funds.
Small Providers Are As Good As Large Providers
Wednesday, May 17th, 2006In the merchant services industry no matter who you speak to you ultimately are going to receive the same product. There are thousands of companies all capable of establishing a merchant account for your business. But these companies all are sales arms of a limited number of companies that actually process the credit cards. Once your merchant account is established, the company that established your account doesn’t control it anymore. The bank that processes your credit cards does. Also, the company that established your account doesn’t do most of your customer support. The bank that processes your credit cards does. So, once your account is established, you are dealing with the same people regardless of the size of the company who established your merchant account.
This is similar to another common misperception in the merchant services industry that local sales agents are better then national sales agents. Or that a local bank is better then anyone else because they are your bank. But once again, they are just alternative fronts for the same back end: the processing bank.
When choosing a merchant account the biggest factor is cost. Once your merchant account is established the only recurring issue you will have is cost. There is no more paperwork to fill out or details to be scrutinized. It just comes down to who will cost you less (after all, it is the same service). When comparing providers, use our comparison worksheet to compare the rates providers have quoted you. Then use the Advanced Rate Calculator to calculate the information you gathered on that worksheet.
Naturally the choice as to whom you choose to provide your merchant account is yours to make. But you should explore all of your options as you might find that the assumptions you have about the size of a company might end up costing you more in the long run.