Why a Paid Online Merchant Account is better than a free Merchant Account?

An online merchant account is a specialized account with the bank allows the merchant to accept online transactions using credit or debit card. With a number of dealers who choose to fast for online businesses, presence of an online merchant account is a necessity.

An important factor in choosing a merchant service provider determines the cost with a merchant account is assigned. These costs tend to vary from provider to provider and is usually high. Therefore, many online business tend to get anxious about these companies accounts. In order to increase their business, service dealers or banks are always with innovative business strategies. Such a strategy is to offer free merchant accounts. In this context it is important to understand the difference between a paid merchant account and a free trader.

A free merchant account is one where the merchant service providers do not collect any membership of the dealer no setup fee rises. This means that the trader need not pay anything to register with the merchant provider and receives the necessary information and payment gateway installation guide for free. Many traders tend to feel that a free merchant accounts are much better than a paid one. However, these accounts have their own set of advantages and disadvantages. It is important to know this for free before deciding an account or a paid account.

In this world, nothing comes free. If you pay next to something that should be compensated for overpayment for something else. The same happens with free accounts. The only advantage of a free merchant account is that the bill without the famous. However, the disadvantages are numerous. These include a higher processing speed and chargeback achieve prices that cost a lot more than the cost of a paid account can. These high prices from vendors to offset the expense of the money lost through free registration.

One can easily see the difference in cost by a simple comparison. Assuming that the average cost levied for a free account by a merchant service provider for online transaction, equal to $ 1.00 + 5% of the total amount of the transaction is made. This means that if a customer bought an item worth $ 100, then the same is paid by the customer. However, the dealer is not paid the full amount. The service takes the cost and deposit the remaining amount in the account of the dealer. Therefore, for every $ 100 transaction, the dealer to lose to cost $ 6. As a result, he receives / she just $ 94 (5% of the purchase price = $ 5.00 + $ 1.00 = $ 6.00). In reality the service is known, even fees as high as $ 14 free accounts. In contrast, the taxes on a commercial or paid account are much less. As a result, greater savings and higher profits appear to be associated with a paid account.

Another major drawback for a free account is the lack of technical and customer service. As a result, the dealers have to endanger the security and stability of the payment gateway and the transaction.

Instead, a paid account all the advantages, including lower prices and the provision of secure transaction gateways to the customer. Banks tend to rewards on transactions where paid accounts offer where supply. Free accounts usually have no such offers.

Therefore, one should choose an online merchant account, depending on the wishes and needs of the company.

Posted in: Merchant Account