Perfect place to land here and get to know about those merchant accounts or merchants who get a tough fight with their credit card payments and their acceptance. There are many merchants who wonder or are curious to know the fact, that without credit cards how can a business work or run. Nowadays, the world has been so high-tech that getting our payments or work done without a credit card is next to impossible. Credit Card Payments are on a boom in every sector. Every sector like groceries, shopping malls, buying puppy food, cosmetics, etc every sector is related to credit card payment. Over 1.1 million users are in the U.S which is a huge amount and hence shows how much an individual is involved in it. Hence, show the dependency of the people on credit card payments. Which shows how much the world has globalized over the year. To get a merchant account, you must submit an application and go through an underwriting process. This takes several days and sometimes weeks. Some businesses, especially those considered high risk have a difficult time getting their application approved.
What is Merchant Account?
An account that is designed to accept payments through credit cards. This may vary from your traditional business as this business is linked between your business and the concerned bank, credit card processor, and your customer’s bank. These concerned parties are responsible to collect the information from the customer’s bank.
Before, getting into business a merchant should get a proper merchant service provider. They will basically get a business entity setup with a merchant account, processor, credit card terminal, and any other tools they may need.
What if you don’t have a merchant account?
There are many merchants who run a high-risk business in which at times they get some trouble in getting their underwriting process done on short notice. Till then they are left with nothing and have to wait for no reason. But, it’s not necessary that one should wait till the end. There are various methods in which they can allow payments without merchant accounts.
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Tour to the Credit Card Working.
Welcome to the process of how it works once the customer purchases the product. Ever wondered how it works? Once the customer swipes the credit card through a physical credit card machine or virtual terminal to complete the transaction. They swipe their card or type in their banking information which allows the card information to be transferred to the network, notifying the cardholder’s issuing bank as well as your processing bank. Once the funds have been confirmed and accepted, the transaction is completed. This process happens usually in a matter of seconds.
The funds from your transactions are stored with the processor until you batch out at the end of the day. Your earnings are then deducted depending on your fees and the remaining balance is posted in your business bank account.
Working Without Merchant Account?
Accepting credit cards without a merchant account is way too much impossible. To complete the process a merchant will require the third party involvement so to complete the process and finally fill the merchant account with cash. These third parties is known as aggregators which provide quick pre-approvals and for the business. As they don’t require any credit checks and lengthy applications.
There are a few aggregators which are popular amongst the people:
These companies may look similar to those who seek merchant services and may have some credit card processing fees. They may take one or two days to process the amount in the merchant account after the initiation of the transaction.
Advantages of not having Merchant Account
Here are some points which a merchant can look after it for not having an merchant account.
1. Simple and easy fee structure
These aggregators usually have a simple and straightforward fee structure. They basically charge a standard fee for the package you take from them. Likewise, if you go for the permanent merchant account service provider you are likely to pay more comparatively. In most cases, you won’t have a setup fee, security fee, refund fee, etc. to worry about.
2. Startup is easy
Signing up in these accounts is pretty easy for the merchants. Setup is quick and easy, so you can start accepting credit card payments online without a merchant account in no time.
Disadvantages for not a Merchant Account Holder.
Everything has positive and negative impacts. After having positive look at this let’s give a look at the negative side.
- 1. Sudden crash of the account
This situation may be faced by high-risk account holders. Merchant usually opts for the one which is way too easy and smooth for the business. The high-Risk Business holders may experience this sudden crash of the account as the amount of risk involved in this. The provider may cancel the account if they don’t want to assume the risk. If this happens, it’s likely you’ll need to find another processor.
- 2. Hindrance in Customer Service Issue
It’s not only you have this high-risk business there are many in the line and facing this problem. So, looking into this scenario they may not provide you the 24/7 service to resolve your problem. Traditional service providers tend to have more services as compared to these. This is something that you’ll appreciate to get a timely, one-stop resolution on an issue so you can keep your business going.
Payment Guru gives a huge platform for the one who wants to try their hands in the high-risk business. We assure you the best way for your concerned business. Feel free as we provide you with the best solution by our experts. We choose what will work best for your business.