Mail Order Companies: Get a Merchant Account for Credit Cards
If you are the owner of a mail order company and do not yet accept credit cards, you may be taking a huge risk. In this electronic age, so many people are using credit cards that can be accepted in seconds, for some, it is a hassle to write out a check or send cash for their orders. Though you can accept and deposit cash easily, most people do not like to send cash through the mail so they will send checks. For you, the owner of a mail order company, accepting checks can take days before you get the money. For an easy, hassle free way to get payment from your customers and be able to have access to your money quickly, get a merchant account for credit cards.
Typically when learning about getting a merchant account for credit cards you will find that most companies will see an increase in profit as well as customers. In fact, customer loyalty even seems to go up as they will be more apt to order from a company they know is able to easily accept credit card payments. Though all of this is very positive, there are some considerations before getting a merchant account for credit cards as a mail order company. One of these things is the fees you will pay.
As mentioned above, you will likely get a greater profit when you set up a merchant account for credit cards, but you will also be paying fees to a payment processor. For mail order companies, these fees are larger than you would pay if you were a brick and mortar or online retailer. The main reason for this is because you will not be able to scan the credit card automatically. You will need to manually enter all of the information into a machine. On the other end, there are additional steps that the payment processor will have to take as well. There is also greater risk during these transactions as you have no way to verify the card belongs to the actual person who placed the order. Looking at typical fees and comparing different companies will give you an idea of what you can expect to pay.
The main fees you will need to pay with most payment processor as a mail order company looking for a merchant account for credit cards are the discount rate, transaction fee and statement fee. On average, a brick and mortar business will pay about 1.29% and a mail order company will pay about 1.89% for the discount rate. On a $100 purchase made by credit card, that is $1.29 and $1.89 respectively. Now that doesn’t seem like such a big difference, but if you process $1000 a month or more, it can really add up. The transaction fee can also add up as well. There is usually anywhere from $0.10 to $0.20 difference between a brick and mortar company and mail order when it comes to fees associated with a merchant account for credit cards.
