Merchant Account for Webmasters - How To Get Started

Signing up for merchant services is critical to the success of a new business. Most customers today do not carry cash, so even brick and mortar stores are dependent on the ability to accept credit cards as a popular method of payment. Online businesses and companies dealing in expensive products or services are especially dependent on quality merchant services allowing them to process credit cards on the internet with Visa, Master Card, Amex, Discover, and other commonly used forms of credit.

There are two basic designations that impact the transaction rates given to any business that applies for a merchant account provider low risk and high risk. Considering where your own business may fall is a good way to prepare for the application process and prevent any surprises when the merchant service company determines your transaction rate. A low risk designation is generally given to businesses that are already established, processing credit cards in person through a card swipe machine, and in an industry that is not subject to any questionable legal or moral judgments. Most businesses fit this description and are able to process their customers’ credit cards for the lowest transaction rates available.

However, businesses can be labeled high risk for a variety of reasons. The most common reason is that they are operating in a questionable industry, like adult entertainment, gambling, or online pharmaceuticals. Credit card processing companies risk their reputations and potentially devastating lawsuits when they do business with operations that are subject to intense moral and legal scrutiny, and insisting upon a higher transaction rate can offer them some insulation from these consequences. Businesses can also be labeled high risk because they are processing credit cards in a way that lends itself to fraudulent practices and frequent chargebacks. A chargeback occurs when a customer disputes a charge that has appeared on his or her credit card and receives a refund for that transaction because the business was unable to produce proof that the transaction was legitimate. Because e-commerce and online businesses cannot have their customers sign credit card receipts the way brick and mortar stores can, these companies do not always have a way to prove that a transaction has been made with the cardholder’s consent. They are also more likely to experience credit card fraud.

Newer businesses, though not automatically high risk are also sources of some concern to merchant service companies. Merchant services assume that years of experience processing credit cards also gives merchants experience in differentiating between legitimate and fraudulent transactions, further reducing their chargeback rates.

Regardless of how your own business is categorized, be it high risk or low, credit card processing options are available to suit all merchants. While you may have to pay a higher transaction and set up rate if your business is risky, the longer you stay in business and maintain a clean record, the more opportunity for you to successfully apply for better rates.

Starting a new business is never easy, but accepting credit cards will exponentially increase your chance of success in the long run. Webmasters must do their research and check reviews on various payment processing companies. Signing up for a merchant account may well be the most important thing you do as an entrepreneur.