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How To Choose A Merchant Account For Your Ecommerce Store

When setting up your ecommerce store, one of the first things you must do is get a merchant account.

This is the best way to have complete control over the payments you get and also get paid immediately into your own account instead of relying on a third-party tool where your money is held by another company, and it takes days or weeks to reach your bank account. 

The sooner you have your merchant account set up, the sooner you can accept payments and start growing your businesses. 

However, getting started with the process of choosing a merchant account is easier said than done. As there are so many options with various benefits and features that will suit different ecommerce businesses. This is why to make this easy for you, we have put together this simple guide. 

Key Takeaways

  • The selection of a merchant account is a crucial step in setting up an eCommerce store, as it directly influences transaction processing and customer satisfaction.
  • Understanding the core features of a merchant account, such as fees, fraud protection, and payment gateway compatibility, are vital in making an informed decision.
  • Choosing a merchant account with transparent pricing minimizes hidden fees and unexpected costs.
  • Prioritizing an account that offers robust fraud protection mechanisms can safeguard your business and enhance customer trust.
  • An account that integrates smoothly with your chosen payment gateway can streamline operations and improve user experience.
  • Regularly reviewing and reassessing your merchant account's performance can help identify areas for improvement and ensure it continues to meet your business's evolving needs.

Assess your needs and niche

The first thing you must do before choosing a merchant account provider is to assess your needs and niche. A merchant account is a long-term commitment. Switching to a new one is a long process. So, you need to pick a merchant account provider who you can continue working with years from now. You need to be able to afford their transaction fees and monthly subscription (if they offer this, too) now and in the future. Some companies will charge you a higher subscription fee as your transaction volumes go up. So, keep this in mind. 

Make sure you invest a lot of time in this. You need to speak to your employees in departments like finance and marketing and also any external experts if necessary. 

Make a list of features you need

While you assess your needs and niche you might want to make a list of features you need. This will make it easy to compare different merchant accounts and select the right one for your ecommerce store…

Here are some features that are essential

Transaction fees: What is the transaction fee for every transaction you generate? Most companies will charge a minimum percentage per transaction + a fixed amount. You need to check what this amount is while selecting a merchant account. Some will even lower the fee as the number of transactions or the subscription fees go higher. This is something that might be beneficial for you if you believe that you will generate enough transactions that would help you take advantage of the lower fees. 

Subscription fees: Many merchant accounts will charge a setup and monthly/annual subscription fees, while some are completely free. Some of the free ones will also help you get set up for free. If you are just starting out, paying this subscription fee can be a burden. This is why it might be better for you to go with a free option or choose a company that offers a free option when you have fewer transactions. However, some of these companies that offer free plans will charge you a higher transaction fee. So, do the math to ensure this is cost-effective. 

High-risk option: You must have heard stories of people having their payment gateways and merchant accounts frozen up with a ton of funds in there. This sometimes happens when you give away a refund or a merchant account provider sees you as a high risk for their low-risk merchant account services. If you are selling any products that qualify you as a high-risk business, it might be better to only work with a payment gateway that offers its services to high-risk businesses. This will ensure that you don’t get suspended and your money stays safe. Suddenly losing access to your hard-earned money can lead to you not being able to meet your daily expenses for running your business. Businesses have gone bankrupt because of this. 

Payment options: Your merchant account provider should allow people to pay with various methods such as credit cards, wallets, bank transfers and other payment options. People nowadays have their preferred way to pay and if they are unable to pay you that way, they will choose one of your competitors. 

Mobile payments: If you want to be able to sell your products in person and not just online, you need to check if the merchant account provider offers this option. Many companies offer mobile card readers and smartphone payments that make it easy to accept payments anywhere. 

24/7 Support: The top merchant account providers offer 24/7 support that will help you get out of a fix any time of the day or night. So, make sure you check if they offer this. You might even want to call to test out the support for yourself. 

Integrations: Hiring a designer to create a custom integration is expensive. Therefore, you might want to see if the merchant account provider offers integrations with both ecommerce platforms and other tools related to marketing, sales, and finance. Most of the top ones will integrate with platforms like Shopify, WooCommerce, and BigCommerce. They usually list these integrations or add logos of them on the homepage. 

These are just a few things to look at. You need to make a custom list that focuses on the features your business personally needs. 

Visit websites

Once you have a checklist, you can begin visiting the websites of merchant account providers and comparing the features on the checklist against their features. Many sites will have a features page and videos where you can quickly learn about all the features. You can also do Google searches to see if a provider has all the features you need. 

Read reviews

The top merchant account providers will have the best reviews. You can read reviews on their reviews pages and also on Google. There are also places like Trust Pilot and Facebook where you can find more reviews. I also recommend that you look up keywords like “merchant account provider name” followed by reviews to read reviews online on search engines. 

Another great place to look for reviews is Reddit. Visit subreddits in the ecommerce space to see the comments people leave about the merchant accounts. 

Sign up for trials or sales calls

The next step is to sign up for free accounts or trials for the merchant account providers you like most. Many of these sites will require you to sign up for a sales/demo call to check if you qualify for an account. You might want to do this if necessary. During these calls, you can learn a lot about the service. A personalized tour like this can be better than setting up an account. 

If you sign up for a free account or trial, you can play around with the dashboard to ensure the platform has all the features you need and is easy to navigate. 

Test out support

While you check out the tool, you might want to call the support staff to see how quickly they respond and take care of your questions. You might also want to test out other support options such as live chat, email, and WhatsApp/Messenger if they offer these solutions. 

Find your perfect merchant account

This is the step-by-step process you should use to find the perfect merchant account solution for your ecommerce business. This will ensure you get it right the first time, instead of ever having to do the time-consuming task of moving to a new one or potentially having your account suspended.

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