Why Every Business Needs a Merchant Account

Starting a business is an exciting endeavor, filled with countless decisions that will shape the future of your enterprise. One of those decisions, which may not seem as glamorous as choosing a brand name or designing a logo, but is equally important, is how your business will handle customer payments.

In today’s digital age, cash transactions are becoming less common as customers increasingly prefer the convenience and security of electronic payments. Therefore, having a merchant account is no longer a luxury but a necessity for businesses.

This article will delve into why every business, especially those new to payment processing and merchant services, needs a merchant account.

Accept Credit and Debit Cards

The number one reason your business needs a merchant account is simple – to be able to accept credit and debit card payments. Without a merchant account, you have no way to process these transactions. A merchant account gives you access to the credit card processing networks so you can securely accept Visa, Mastercard, American Express, Discover and any other major cards your customers may use. This opens up an entire revenue stream that would otherwise be inaccessible.

In today’s world, consumers expect to be able to pay with plastic, even for relatively small transactions. Not having card acceptance means lost business for you as customers take their purchasing power elsewhere. With a merchant account, you can meet buyer expectations and make it easy for them to pay you.

Tap Into a Trillion Dollar Market

Speaking of purchasing power, consider these statistics:

• There were over 4.2 billion Visa cards and over one billion Mastercards in circulation
• In 2022 alone, over 192.5 billion Visa transactions were processed, totaling $11.6 trillion in sales
• US credit card debt was around $986 billion in Q1 of 2023

As you can see, credit and debit card spending add up to a multi-trillion dollar market. By getting a merchant account, your business can tap into this abundant stream of consumer spending. Don’t miss out on your share of this economic pie.

Even if your business is small right now, a merchant account allows you to scale up and compete for card transactions.

Avoid Losing Sales

Imagine this scenario: a customer is ready to make a substantial purchase from your business. But when they pull out their credit card, you have to tell them you only take cash or checks. Disappointed, the customer leaves and takes their business elsewhere.

This hypothetical situation demonstrates how not having a merchant account can result in losing sales. Customers today expect ubiquitous payment options. If your business cannot offer the flexibility and convenience of card payments, you run the risk of abandoned shopping carts and lost opportunities.

A merchant account mitigates this issue by letting you take any form of electronic payment. When customers are ready to pay, you’ll be ready to accept their cards and complete the transaction. Don’t lose business simply because your payment options are limited.

Expansion of Customer Base

A merchant account doesn’t just allow you to accept card payments in person, but also over the phone, through mail orders, and online.

This opens up your business to a larger customer base beyond your local area. With the rise of e-commerce, being able to accept online payments is crucial to stay competitive in today’s business landscape.

Build Customer Trust and Loyalty

Consumers likely perceive businesses that accept credit and debit cards as being more legitimate, trustworthy, and established. Why? Accepting plastic requires having a relationship with a bank and being approved to process card transactions securely.

In contrast, cash-only businesses or those without merchant accounts are generally viewed as less professional or financially stable. If customers do not trust your business, they will be less likely to shop with you regularly.

A merchant account helps legitimize your operations and build customer confidence.

Accepting cards also provides convenience that people appreciate. When customers can easily pay you with their card of choice, it makes for a smooth, seamless experience that keeps them coming back. Just be sure your merchant account provider offers robust fraud protection to keep both your business and customers safe.

Get Paid Faster

One cash flow advantage of having a merchant account is that you get paid faster compared to checks.

When a customer pays by debit card, the funds are immediately withdrawn from their bank account and deposited into your account, usually within a few days.

Credit card payments take a few days longer to clear but are still faster than waiting for checks to be written, mailed, deposited, and cleared. The quicker you can collect payments, the better for your business’s liquidity and financial position. Plus, accepting electronic payments reduces the chance of late or missed payments.

For small businesses, getting paid quickly can be a lifeline. You don’t want receivables tying up your working capital and hampering your operations. With a merchant account, you can speed up your cash flow and put revenues to work sooner.

Gain Useful Data Insights

Many modern merchant account providers come with reporting tools and analytics that give valuable insights into your business’s payment transactions.

By diving into your sales data, you can identify customer purchasing patterns, understand which products perform best, pinpoint seasonal or holiday trends, and strategically target optimization opportunities.

Payment data analytics help you make smart business decisions backed by hard metrics rather than guesswork. The reports can also aid tax preparation and accounting to give you an accurate financial picture.

Make sure to choose a merchant account provider that offers robust reporting functionality.

Reduce Liability With Built-In Fraud Protection

Payment card fraud is a constant concern, costing merchants billions annually. It pays to work with an experienced merchant account provider that builds fraud prevention directly into their platform.

The best merchant services offer real-time monitoring, algorithmic screening, suspicious activity alerts, and other layers of protection.

This reduces your liability by flagging and rejecting fraudulent transactions before they are processed. Look for a provider with proprietary anti-fraud technology, dedicated security staff, and vigilance across the payments ecosystem. Fraud prevention is a key reason to partner with an established, reputable merchant account company. Don’t leave your business financially vulnerable.

Accept Payments From Anywhere

Today’s merchant accounts boast compatibility with a wide array of payment hardware, software, and mobile devices. This allows businesses to process transactions from virtually anywhere—retail stores, restaurants, online stores, trade shows, delivery vehicles, pop-up locations, and more.

For example, modern point-of-sale terminals offer NFC, EMV chip card, and contactless/tap payment acceptance.

For on-the-go businesses, Bluetooth credit card readers allow taking payments with a smartphone or tablet. Robust ecommerce integrations enable processing orders from a website shopping cart.

No matter how your business operates or where sales originate, a merchant account can power your payments.

Level the Playing Field

For startups and small businesses, competing with larger, established companies can seem daunting. But a professional merchant account helps level the playing field.

When you have the same ability to accept all major cards and payment methods, your capabilities are similar to those of bigger competitors.

A merchant account combined with compelling products and service allows young companies to go head-to-head with the “big guys.” Don’t let payment processing limitations hold your business back. With card acceptance powered by a merchant account, you can compete on your own merits.

Enjoy Peace of Mind

Finally, a top benefit of having a merchant account is peace of mind. You can run your business knowing card payments will smoothly process each day and funds will reliably end up in your bank account. This surety allows focusing time and energy on higher-level entrepreneurial tasks rather than worrying about payments.

Knowing your merchant account provider has you covered with security, support, uptime guarantees, and more lets you sleep better at night. Their expertise frees you to grow your core business.

How to Choose the Right Provider

Clearly, the reasons for securing a merchant account are compelling.

But keep in mind that not all providers offer the same quality of service. Here are a few best practices for choosing your merchant services partner:

• Look for an established company with a solid reputation and track record in the industry. Avoid fly-by-night providers.
• Make sure they offer the payment hardware, software, and other services your business needs.
• Evaluate their security technology and anti-fraud capabilities. Your funds should be well protected.
• Consider fair, competitive processing rates and fee structures with no hidden charges.
• Check that they integrate with your Point of Sale system or shopping cart platform.
• Look for responsive, easy-to-reach customer support.

Following the above tips will lead you to a stable, ethical, and dependable merchant account provider. The effort is well worth it for the long-term peace of mind and convenience a merchant account delivers.

Check out our in-depth comparison table to learn more about the fees, features, and capabilities of our favorite merchant services providers.

Go From Transactions to Relationships

As we have explored, the reasons for getting a merchant account are many: accepting more payment types, tapping into trillions in consumer spending, avoiding lost sales, building loyalty, accelerating deposits, gaining insights, reducing fraud liability, supporting mobility, leveling the competitive playing field, and enjoying peace of mind.

On a higher level, merchant accounts allow you to transform financial transactions into meaningful customer relationships and business growth. Don’t limit the potential of your venture by only dealing in cash or checks. Embrace the flexibility and advantages of electronic payments with a top-tier merchant account. Your business’s future success may depend on it.