Merchant accounts have become vital for small businesses looking to grow their business and succeed in today’s digitally-driven business environment.
A merchant account enables small businesses to accept and process electronic payments, such as credit and debit card transactions. It serves as a bridge between the small business and the customer’s bank or credit card issuer, facilitating the secure and efficient transfer of funds during an online or in-person purchase.
Merchant accounts are highly advantageous for small businesses. With a merchant account, small businesses can offer a variety of convenient and safe payment options to their customers, leading to increased sales, improved customer satisfaction, and a competitive edge in the market.
Merchant accounts offer a range of beneficial features for small businesses, such as check processing services and online reporting tools. These features empower small businesses to streamline their operations and effectively manage their transactions.
In this guide to merchant accounts for small businesses, we cover how to set up a small business merchant account and the numerous benefits of merchant accounts for small businesses.
How to Set Up a Merchant Account for Small Businesses
Follow these easy steps to set up a merchant account for your small business:
1. Select a Merchant Account Provider
Small businesses can set up a merchant account with a merchant account provider. Merchant service providers will set up the small business merchant account and facilitate the management of the account with various services. To find out more on merchant services for small businesses, check out our guide.
Here are some key factors to consider to find the best merchant account for small business:
- Range of Services: Merchant services for small business include payment processing, transaction authorisation and settlement, fraud detection and prevention, chargeback management, and compliance with regulations. Ensure that the provider you choose offers a comprehensive range of services that align with your specific business requirements.
- Fees and Pricing: Merchant account fees for small business may include transaction fees, monthly fees, setup fees, and equipment costs. Compare the pricing structures of different providers and choose one that offers competitive rates without compromising on service quality.
- Security and Compliance: Security and compliance are important factors to consider when choosing a merchant account provider. Look for features like encryption, tokenisation, and compliance with industry standards such as PCI DSS when choosing between providers.
- Integration and Compatibility: You need to ensure that the provider’s payment processing solutions will integrate seamlessly with your existing software and hardware, such as your Ecommerce platform or point-of-sale (POS) system. This will help streamline your business operations and simplify the payment process for both you and your customers.
- Reputation and Reviews: It is important to research the provider’s reputation and read reviews from other small businesses using their merchant services. This will give you an idea of their reliability, customer satisfaction, and the overall quality of their services to guide your decision.
2. Complete Application Process
When you have chosen a merchant account provider that best suits your small business needs, you can then complete the application process. This typically involves submitting business and financial information, such as your business registration details, tax identification number, bank account information, and estimated transaction volumes. The provider may also request additional documents to verify your business’s identity and creditworthiness.
3. Set Up Hardware and Software
Once the merchant account provider has approved your merchant account application, they will then supply you with the necessary hardware or software to process payments. This may include credit card terminals, POS systems, or online payment gateways for Ecommerce businesses. Your provider will support you with setting up the hardware or software to ensure a smooth payment process.
4. Integrate Merchant Account with Existing Systems
You will next need to integrate your merchant account with your existing systems. Integration ensures seamless transaction processing and allows you to start accepting payments from customers.
For Ecommerce businesses, this will include connecting the payment gateway to your website or shopping cart platform. For physical stores, this involves configuring your POS system to communicate with your merchant account.
Test Payment Process
Testing the payment process is a crucial step before accepting payments from customers. You will need to perform a few test transactions to ensure everything is working correctly. This will allow you to identify and fix any potential issues with your payment system before they impact your customers’ experience.
6. Start Processing Payments
With your merchant account set up and tested, you can start accepting credit and debit card payments from your customers. Your new merchant account will enable a seamless and secure payment experience for your customers, contributing to customer satisfaction and increased sales.
Small Businesses Get Integrated Payment Systems with Merchant Accounts
One of the many advantages of having a merchant account is the ability to integrate payment systems seamlessly into both Ecommerce and physical businesses.
An integrated payment system, which combines various payment processing methods into one platform, allows businesses to manage transactions across multiple channels consistently and smoothly. This integration benefits small businesses with both an Ecommerce and brick-and-mortar store by consolidating operations and simplifying transaction management.
An integrated payment system also improves the customer experience by providing a consistent and user-friendly payment process across all sales channels. Merchant accounts enable Ecommerce businesses to accept payments on their websites and allow brick-and-mortar stores to process credit and debit cards through POS systems. This flexibility caters to customers’ diverse payment preferences and enhances their experience with your small business.
An integrated payment system can assist small businesses to collect and analyse customer data across all touchpoints. This data can provide insights into customer preferences, behaviour, and spending habits, enabling you to tailor your marketing and sales strategies more effectively. This targeted approach can help drive revenue growth and improve overall business performance.
Benefits Received by Small Businesses with Merchant Accounts
Alongside the integrated payment systems, merchant accounts offer these benefits for small businesses:
- Increased Sales: Merchant accounts for small businesses allow you to accept credit and debit card payments from your customers. This broadens your customer base and increases your revenue. Paying with a card is easy and convenient for customers, which can increase impulse purchases and higher sales for your small business.
- Enhanced Security: Reputable merchant account providers will ensure the security of your online transactions and customer data. They implement robust security measures, such as encryption and tokenization, to help protect your small business and your customers from fraud and data breaches.
- Simplified Accounting: Merchant accounts for small businesses often come with detailed transaction reports and online reporting features. These tools make it easier to track sales and revenue. This can simplify accounting tasks and reduce the potential for errors.
- Better Customer Experience: Merchant accounts contribute to improving customer satisfaction with your small business. By offering multiple payment options and providing a smooth checkout process, your small business can enhance the customer experience. Satisfied customers are more likely to return for future purchases and recommend your business to others, resulting in increased customer retention and revenue.
How Pixxles Can Help You Open a Merchant Account for Your Small Business
Pixxles is a merchant account provider for businesses of all sizes. With seamless Ecommerce platform integration, competitive pricing, and exceptional customer support, Pixxles is the total solution for merchant accounts for small businesses.
Our standout features include our fraud detection and prevention tools, chargeback management, and comprehensive online reporting capabilities. With Pixxles as your merchant account provider, you will gain access to a robust and secure payment system that will assist your small business to thrive.
Can I create my own merchant account?
Creating a merchant account involves complex processes, technical expertise, and ensuring compliance with various regulations. It is recommended to partner with a reputable merchant account provider to create your small business merchant account.
Is a merchant account the same as a business account?
A merchant account and a business account are different. A merchant account is a specialised account with a merchant account provider that enables businesses to accept online and in-person credit and debit payments from customers. A business account is a bank account designed for businesses to receive and make payments and manage their finances. Funds received through your merchant account are typically transferred to your business account.