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| affordablemerchantsolution.com |
When it comes to merchant accounts, some wireless business owners will sign up with the cheapest service provider they can find. Others won't settle for anything less than the company with the newest and flashiest technology. But smart wireless business owners shop around until they locate the most cost-effective merchant services provider that best fits their company's needs.
If you want to make an intelligent decision about which credit card processing solution is best for your wireless business, you must first educate yourself on the basics of merchant account choices.
Point-of-Sale Software
How it works:
Credit card information is entered into a computer or dedicated terminal and then sent to the processor over phone lines with the aid of a modem.
Benefits:
The authentication process is completed in seconds, and POS software usually comes with programs that can work hand-in-hand with your inventory and accounting systems.
Best suited for:
Businesses who receive payments over the phone or fax lines or through e-mail or traditional mail services.
Real-time Internet Processing
How it Works:
The customer enters the credit card information into a secure website, and the data goes directly to the processing entity.
Benefits:
The entire authentication process is even faster than with point-of-sale software, and the funds are automatically deposited into the company's account within a day or two.
Best suited for:
Internet businesses or companies who conduct a high number of transactions on a daily basis
Wireless Processing
How it Works:
A customer's credit card information is entered into or swiped through a portable terminal which can be a stand-alone device or attached to a cell phone or laptop computer. The data is transmitted digitally to the processing center.
Benefits:
Allows credit card payments to be processed on-site immediately instead of having to record the information and enter it into a computer when you return to your base of operations.
Best suited for:
Service providers like repairmen or landscapers who accept payments at their customers' locations.
Interactive Voice Response Systems
How it Works:
The credit card number is punched into any touch tone phone. The system uses voice prompts to guide the individual through the entire transaction.
Benefits:
Requires a minimum of training for employees and allows credit card payments to be processed anywhere.
Best suited for:
Service providers who conduct a small number of high-dollar transactions away from their home office.
After you have chosen the type of merchant account that is most appropriate for your business, you must figure out which service provider can give you the processing system that you need at the most affordable price. To do that, you must understand the pricing structure of merchant services providers.
Almost all merchant accounts have what is called a discount rate (also known as the periodic rate). This is the percentage of each transaction amount that will be paid to the entity that processes credit card payments. Most discount rates are anywhere between 1% and 5% (though some are higher).
Some accounts also offer a qualified rate, which is the lowest discount rate category on a given account. To maintain this rate, companies must meet a certain set of criteria, which may include a minimum number of transactions, full compliance with the merchant services provider's regulations, and a low chargeback rate. If these criteria are not met, the provider may raise a company's discount rate (much like credit card companies do with consumers who exceed their credit limit or don't pay their bills on time).
Another common expense associated with merchant accounts is the transaction fee, which is a flat rate that is charged every time a credit card is approved. This fee is assessed regardless of the amount of the transaction. Other fees which can be assessed by a merchant services provider include monthly or annual fees, an interchange fee for the use of the credit card processing network, and a minimum balance surcharge for the failure to process a certain number of transactions in a given time period.
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Therefore, if your wireless business processes a high volume of transactions daily involving low-cost items (like an online retailer that sells T-shirts, for example), you would likely opt for a merchant account with a low transaction fee (or none at all). However, if your business deals with a small amount of high-dollar transaction (such as an air conditioning/heating installation and repair service), then you would probably look for an account with the lowest discount rate you can find.
Like any important business decision, selecting a merchant service provider should only be done after a significant amount of research into a provider's features, pricing, and reliability. Once you pick the merchant account that is ideal for your company, you should allow at least two to three weeks to implement the system. Once it is up and running, your merchant account should operate seamlessly and dependably - which will help boost the productivity of your wireless business and improve your company's bottom line.
Tony Gottleib is a FREELANCE writer who writes about a range of topics including wireless businesses and credit card processing services.
By: Tony Gottleib
Article Source:EzineArticles.com
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