Consider your banking situation at the moment. You might have a personal account for your bills and household expenses. You may also have a commercial bank account in your business name. If you don’t, there are reasons why perhaps you should. It can be helpful for tax purposes, and to keep your costs separate. In some situations, it’s a survival tactic, because if you have distinct accounts and your business crashes, then it may make it more difficult for creditors to come after your personal assets when they want to settle your business debts.
It can also be helpful for billing purposes. It’s fine when people are paying cash, but when your customer wants to pay by check or credit card, they should make the check out to your store name or business name rather than your individual name. Getting these mixed up can be perceived as unprofessional at best and may even cause confusion that could result in chargeback fees. As part of this process, you would also require a merchant account that offers security, encryption, and PCI compliance for your credit card transactions.
These companies transact credit card and debit card payments, linking your bank to your customers’ banks. Some offer additional services too, such as debit card transactions, ACH, eChecks, and so on. While cash, check, and bank transfers are possible without a merchant processor, credit card card payments generally are not. But card networks like Visa and MasterCard don’t deal directly with individual businesses.
They deal with merchant card processors, who then function as intermediaries. This makes life easier for your business and provides essential security for card transactions. Payment processors also use payment gateways to link traditional banking networks to the Internet, making online payments possible.
There are four main ways to accept credit or debit card payments, and they apply regardless of whether your business is small, medium, or is worth billions. One, you can accept cards in person, swiping them on a device. Two, a customer can enter their details onto the check-out page of your online store. Three, a business can manually enter a customer’s information, which they may receive over the phone, by mail, or in person. And four, a business can call in the card information for a voice authorization over the phone, although this method is rarely used anymore, in part because it usually involves an extra fee for the business. In all these cases, the software, hardware, and processing is provided by your merchant processor, (sometimes called a payment processor).
You can’t accept credit cards any other way, so if you want your business to succeed, it’s essential to have a merchant account. It’s not about the size of your company. It’s about the partnership and linkage between your company, the card networks, and bank business accounts. You can’t set up these links as an individual. And your merchant account can also put all your business income on a single platform, so it’s easier to monitor finances and maintain good cash flow.
For more reasons why you need a merchant account for your mid-sized business, or to sign up for a merchant account, please call (888) 924-2743 or go to Charge.com.