Many new business owners understand that they need to accept credit cards if they hope to capitalize on the largest amount of customers. What they may not realize is that setting up merchant accounts does more than open up your business for accepting these other payment methods. In fact, merchant accounts can be a great way to build business credit, which can come in handy down the road when it comes time to expand. Furthermore, it offers you a greater level of security on these transactions and gives you extra peace of mind. Keeping that in mind, you need to be careful which company you chose to set up your merchant accounts through because like all other services not all are created equal.
Accept Credit Cards
The obvious reason for a business owner to set up merchant accounts is to accept credit cards. Credit cards offer a safer and more convenient way for people to pay for goods and many individuals simply do not pay any other way. This has made it difficult for small shops, but fortunately affordable merchant solutions have started to become more and more common. With these affordable merchant accounts, even the small mom and pop stores can start accepting credit cards without fear.
Beyond just allowing you to accept credit cards, the fact that these transactions go through your merchant account also helps to make it easier on your bookkeeper. Rather than have to sort through and enter each individual transaction, merchant providers include helpful accounting software that will allow you to simply transfer the information. This saves you time when you accept credit card payments and also money spent on sorting through the information.
Build Business Credit
One distinct advantage that often gets ignored by those looking for merchant accounts is that this service can actually work to build your business credit. When a transaction goes through your merchant provider, you are actually getting paid before the money is actually transferred. This means that every dollar you make is initially counted like a loan. At the time the payment goes through, you are paying back the money that was deposited into your account, which keeps you in good standings. In other words, so long as you minimize the amount of charge backs to your merchant account, you will be effectively raising your business’s credit-worthiness.
Keeping Customers Happy
Accepting credit cards may seem like it is just a benefit to your bottom line, but it can also go a long way to keeping customers happy. Generally speaking, people understand the benefits of using a credit card and often earn points on their purchases. With this in mind, they look for places that accept credit cards and when they find a business that does not, they are reluctant to shop there. Even though they might shop with you in one instance, convenience is a major concern.
By giving your customers the ability to charge their purchases, you make it more likely that they will come back again. You also give them a piece of mind that, should something go wrong with the purchase, they are protected by their credit card company. In the end, it is this level of confidence that allows you to retain customers and continue your business.