The internet has changed the way Americans shop. Even in the wake of the economic recession, online sales have increased for thirteen consecutive months in the United States. At the present pace, online sales are on target to surpass retail purchases within five years. What does this mean for businesses in the U.S.? To begin with, it means that they must establish an online presence. No, they have not become an e-business overnight or cut out the physical storefront, but they should begin selling online to draw in younger shoppers.
As the numbers clearly illustrate, the consumer of the future is far more likely to shop online than he is to stop at the mall. Unfortunately, selling goods or services on the internet is a bit more complicated than simply setting up a website. A business owner must also apply for and obtain a Merchant Services Sales Jobs. Because the primary payment options for online sellers is and always will be electronic payments, a business must be able to process credit and debit card transactions.
What are the advantages?
Over ninety percent of online payments are made using a credit or debit card. The rest are completed with payment services like PayPal or with personal checks or money orders. Because they are slower and less reliable then instant electronic payments, checks and money orders are rarely accepted by online businesses. Payment services are just as fast as credit/debit card, but both the buyer and the seller typically have to be members and the rates are quite a bit higher. Credit/debit card are clearly the most popular, reliable, and affordable option for companies that want to sell on the internet. But again, a business must first apply for a merchant service account, and there is no guarantee that they will get one.
What do they do?
As you may have guessed by the title, the provider offers the merchant a crucial service. It is their job to examine every single debit/credit card transaction to ensure that the customer can actually pay. If the charge is approved, the provider will send the customer's debit/credit card company a bill and await payment. When the payment is received, they will send the merchant the balance minuses a small, but variable fee.
As you may know, banks and financial institutions are obsessed with risk. Every loan they issue or relationship they have takes risk into account. They are particularly fastidious when it comes to merchant service contracts. Depending on the type of account, accepting credit or debit card payments can be risky. As a general rule, the more contact a seller has with his buyer, the less risk. If, for example, a business accepts credit/debit card payments in person, they are often considered low risk. There are two simple reasons for this.
The first is that they will have a signed and dated sales receipt on file. And the second is that they are able to compare the signature on the back of the card with the signature on the receipt and thus prevent fraud. Why is this important? The single most expensive charge for merchant service providers is called a chargeback. A chargeback occurs when a customer decides he wants a refund. His credit or debit card company is then obligated to request restitution from the provider.
At this point, the provider is forced to investigate the claim to determine its validity. This takes time and money.If the provider chooses to issue a refund, the merchant will be hit will all the related fees and may also be fined. In extreme cases with particularly risky merchants, the account may be terminated. We mention these charges because they are the single most important factor in determining the basic fees.