When someone wants to pay for something at a register, they usually reach for the credit card or a wad of cash. That’s beginning to change, though, as smartphone adoption rates rise. One major reason why is that the concept of a digital wallet is finally becoming reality.
Digital wallets are accounts online that remain persistent across multiple devices. Another way of saying that is to say that you can access one of these digital wallets from anywhere you have an Internet connection. Customers can pre-load these wallets with whatever dollar amount they choose, and can receive money from others as well.
The first benefit to note is that these transactions are fast. Money is transferred quickly, so the user always knows what he or she has available in the digital wallet. In addition, wallets are loaded from the bank account, so they are separate spaces customers can use to track spending money.
Currently, adoption rates are rising as more and more individuals utilize smartphones.
Businesses are also shifting away from the cash only business model that had been so popular throughout modern history. Cash is becoming a big liability to store on the premises of a business, and credit card technology is beginning to fade as digital wallets make their debut.
The reality is that these payment systems will most likely help secure the finances for a great many people who struggle with their current bank accounts. Fewer fees and faster transactions mean most people will see greater control over their bank accounts and their money in the next few decades.
Transfer speed refers to the speed at which money is transferred between merchant accounts and customer bank accounts. Transfer speed is important, because it determines when you’re paid for the work or items you’ve sold. For small businesses, transfer speed plays a major role in operations for the first few years, as it can impact your operating expenses.
Call customer support for the payment gateway services you’re considering, and ask them how long it takes to process a particular transaction. You might find that you’re only paid once a month, or two weeks after a transaction has been approved. For many, that presents a problem.
The only way out of this dilemma is to shop around, but that’s not possible (or easy) when you’re locked into a contract with a payment processor. Make sure you inquire about payment transfer speed, and get some background information on online credit card processing.
Transfer speed also refers to the amount of time it takes for the user’s browser to load a page, which also plays a significant role in whether he or she completes a transaction. If your site is image heavy, as most eCommerce websites are, then you’re probably going to have trouble loading immediately. You can try compressing your thumbnail images, and using a caching plugin (if you’re utilizing WordPress), to speed up the time it takes for the customer to see a static page.
If you can process transactions in a reasonable amount of time, and present the customer with the Web page he or she wants to view in a decent amount of speed, then you’ll retain more customers and ultimately sell more product.
Bio:Charge.com offers a reliable method of online credit card processing with free software, and no setup fees.
Customer service probably isn’t the first thing you think about when you’re trying to consider credit card processing services offering competitive rates. You’re usually thinking about the costs to your business, so you can control overhead. That’s not the wrong approach, but don’t just dive into an account with great rates. What they lack in fees, they may make up for in poor customer service. You don’t want to be stuck on Black Friday with a register that won’t boot up and no cause to request help.
First Point of Contact
When you’re searching for a payment gateway, you need to speak with customer service to ask some basic questions. Depending on how easy it is to get someone on the phone, you should have a good indication of the quality of customer service. Talk to the representative and see what kind of knowledge he or she has on hand. Good customer service will give you the answers you need, without jostling you from one department to the next.
Support
Whether you operate a high risk merchant account, or a standard business with typical rates, you’re going to require setup and maintenance assistance. Modern payment systems rely on the Internet within your store to help you transmit payment information. If your system is non-responsive, and you’ve confirmed your Internet service is active, customer support will be your safety net. Make sure you’re not being charged for instructions on how to reboot your system.
Final Thoughts
Based on their response time, you should be able to form a solid picture of what kind of service to expect. Customer service is very important to merchant account holders, so make sure your representatives are accessible.
For 6 years running, Charge.com Payment Solutions, Inc. has been voted the number one merchant account provider offering low fees and current hardware.
If you’re looking to open a retail business, you might be wondering whether you’ll need a merchant account or if you can get by as cash only. The good news is cash is the most common form of tender, and it’s only up until recently that the idea of a cash-only business has started to fade. Here, we’ll discuss the pros and cons of a cash-only business.
Cons
If you run a cash-only business, you can only accept cash. What happens when a customer doesn’t have enough cash on hand? In addition to the potential for lost customers, your business becomes a target for theft when it’s known you keep large sums of cash on hand. You’re also not exempt from tax forms either. You’ll need to complete form 8300 if you receive more than $10,000 in cash from one buyer.
Pros
A business that runs on cash stays funded. It takes time for funds to clear, so running a business on cash helps eliminate a waiting period that can hurt smaller businesses with low liquidity. Cash also involves less bookkeeping since it’s a simple tender, which means businesses save money on hiring bookkeepers or keeping accountants.
Accepting only cash also dramatically reduces the chances a business can be defrauded. It’s still possible to commit cash fraud, but it’s far less common than say check or debit card fraud.
Choosing the Best Option
Ultimately, it’s up to you which choice is yours. Some businesses find it easier to start as cash-only establishments and eventually switch to merchant accounts. Others may find the legitimacy of a merchant account essential to their brand. Either type of business is viable.
Merchant accounts have two fairly common pricing tiers consisting of three and six-tiered pricing. This is by design, of course, because these are the easiest pricing tiers to explain to potential buyers. All fees present some form of risk to the merchant, but chargebacks present the greatest potential risk to banks and providers so merchants tend to feel the brunt of these the most.
Chargebacks and Refunds
There is a major difference between a chargeback and a refund. Refunds are mutual because the merchant agrees to take the purchase back and refund the buyer the money they’d spent. Refunds can include re-stocking fees as well. Chargebacks are initiated by the user and carried out between the user and the bank.
The provider can potentially be exposed to millions of dollars in unpaid debt if the merchants the provider deals with are unscrupulous. If the merchant fails to pay those costs, for whatever reason, the cardholder must pay to make the deal right.
Therefore, most merchant companies will take that risk into account when they underwrite the contract. There may be in-depth assessments of a merchant’s potential risk on the bank’s part, which is all a normal part of the process.
Some banks may also impose limits on the amount a merchant is able to charge back to a buyer. Failure to stay within these limits can lead to fines or strict regulations on the merchant’s account. That’s in addition to the chargeback fee that accompanies these transactions.
Bio:Firoz Patel is a passionate marketer and technology enthusiast who founded AlertPay Inc. in 2005. Currently, Firoz Patel lives in Quebec and oversees development of the Payza platform.
