When you are just getting started with a business, it might be challenging to understand the intricacies of payments. Having a well-suited merchant account is a convenient option to receive payments once you have established a company bank account. The reason behind opting for a merchant payment avenue is that, without an online merchant account, you may not be allowed to accept credit or debit card payments.
The merchant payment market in India is estimated to reach a sum of Rs.33 trillion by 2025. This shows our dependence on online transactions as a country of customers belonging to different ages and genders. In the article below, we have put together certain points detailing the need for choosing the best merchant account for your business.
What is a Merchant Account?
Payments made with debit or credit cards, once processed, are deposited into an online merchant account. Along with payment gateways and payment processors, it’s a critical component of the payments process. In simpler terms, a merchant account is a bank account that accepts payments made through Debit Cards and Credit Cards in the process of making digital payments for business transactions. A merchant transaction is completely safe and reliable for accepting payments through several different avenues.
There is no way for you to accept credit card or debit card payments from your consumers without a merchant payment system. You have the option to choose when it comes to selecting an appropriate merchant solution for your business. It all depends on the type of facilities you want from your merchant account. The only difference between different merchant accounts is the transaction fee charged by the service provider. Make sure to gather information regarding varying merchant account service providers for your business before deciding upon the one that suits you the best.
Advantages of Finding the Best Merchant Account
With online customers, cash and cheques are becoming a thing of the past, while internet and digital payments are all the rage. A merchant account or an account that permits the holder to accept different forms of payment (usually Debit Cards or Credit Cards) is necessary to take advantage of these possibilities. Online payment gateways such as Zaakpay present growing opportunities for merchants to take benefits of the new wave of online transactions. Merchants can activate secure payments for their business with Zaakpay, making use of their quick installation and instant onboarding.
Following are the advantages of finding the best merchant account for your business.
- Card Transactions: With a merchant account, you have an option to accept payments from Credit Cards and Debit Cards. As per a survey, card users spent close to Rs.40,000 crores via digital wallets and payments in the year 2021. It is becoming the new “standard” for consumers to make payments. The elimination of any friction in the purchasing or payment acceptance procedures may help businesses gain new consumers while improving cash flow.
- Elevated Profits: Several studies and research over the years have demonstrated that consumers spend more when they have the option of using digital currency instead of cash. In the year 2021, close to 44 billion digital transactions were recorded in India. This shows the inclination of customers towards Debit Cards and Credit Cards when it comes to making payments. Your company’s sales and general growth may be impacted by this rise.
- Improved Financial Planning: With digital and internet payments, transactions are handled more efficiently. Using a merchant solution instead of counting cash can help you keep track of your payments and make it easier to anticipate your cash flow.
- Protection from Frauds: Businesses that accept electronic payments may avoid the headaches and expenses associated with financial frauds by utilizing merchant account services. You may also take recurring merchant transactions for services you regularly deliver when your merchant account is used in conjunction with a full payment system.
- Convenience for the Customer: Customers who can make purchases via different methods are more likely to be satisfied with a business. Your customers will appreciate your company more if they can easily shop whenever they want, whether they use Credit Cards or Debit Cards, mobile payments, or even recurring billing.
Risks Involved with Not Having a Good Merchant Account
Please make sure you are aware of the benefits and dangers involved with merchant services, as well as their drawbacks, before deciding on a supplier. So, make sure you know what you’re getting yourself into and seek the advice of an expert or someone who has been there before.
Following are some of the risks that are involved in times when you do not have a well-suited merchant account for your business.
- The Settlement Period: It is possible that the customer’s money won’t reach you right away. Before you get your money, the payment processing company or merchant service provider may keep it for a settlement period of 30-60 days. Paying via a third-party processor has this drawback. If you do not have a merchant account that provides you the kind of services you want, payment delays can become a regular part of your business.
- Increasing Costs: It may cost you a bit more to open a merchant account than it does to open an ordinary bank account. In addition, every time a customer uses a Credit Card, the business incurs a fee. The cost might also be included as an operational or business expense. A reputable merchant service won’t take advantage of you unless you have a high credit score or a high net worth. This is why choose a suitable merchant solution provider like Zaakpay so that you can justify the high costs with even higher revenue.
In conclusion, accepting Credit and Debit Cards for payments is a regular feature in almost every business. Without this facility, you might end up losing a lot of customers and even make depreciated turnovers in the long run.
While merchant accounts aren’t cheap, refusing to accept credit cards can be a serious roadblock to growth. Opening a merchant account is a no-brainer as long as your investment yields a sufficient increase in revenue. Online payment gateway such as Zaakpay make sure your customers have a pleasant experience while shopping, along with providing you with a safe place to receive payments.
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