Choosing the right merchant
It is good advice to shop around for the best deal with most things you buy and choosing the right merchant to handle your business’s credit card transactions is no different.
If your business is going to offer merchant services to your customers, you will have to get approved for a merchant account, so you can set up credit card processing and eventually even accept mobile payments.
As a merchant, you can accept credit card payments from your customers, but there are also other more specialised independent processing companies.
A merchant account is a bank account established by a business to allow the company to accept payments from customers by credit and debit cards.
The merchant account also includes an agreement between the bank, the retailer involved, and the payment processor for settlement of the debit or credit card transaction.
Business advisory services manager at the Small Business Development Corporation Lisa Legena says there are a bunch of different options out there for businesses to receive payments, with payment terminals and eCommerce solutions available from big banks, customer-owned institutions and even independent software developers.
She says merchants apply different fees to each payment option, so it’s worth shopping around to get the best deal for your business.
Typical costs are credit card processing fees, debit card processing fees and a monthly or once-off fee to purchase or hire a card reader or payment terminal.
“I think you need to treat looking for the right merchant in the same way that you would with any other supplier,” Legena says.
“You go out and see what’s available, understand what their fees and terms are and negotiate a deal. It is often easiest to start with a merchant service you have a relationship with such as your bank and see how they compare to other service providers.”
Legena says you should first consider what type of credit facilities your business needs to help you to decide what to look for.
“Think about how many transactions you are likely to expect over a week or a month,” she says.
“For instance, if you’re a builder a merchant credit facility may be required but it’s unlikely a large number of transactions would be needed as part of your package compared with a busy clothing store that is processing hundreds of transactions each week.
“The other consideration is your target market. So, if you’re targeting millennials, they may demand different options in terms of how they want to pay compared with older demographics. Does your business offer the right facilities for the clients you cater to?
“If you’re collecting data like credit card information, how is that stored? Are you going to be compliant in terms of privacy? Your brand and reputation is at stake if people’s credit card or payment data were to be obtained from your merchant account.”
You should familiarise yourself with the Australian Government’s notifiable data breach scheme.