Many people have decided to embark on their dream of entrepreneurship by starting their own home based business after facing an uncertain future due to unemployment and laid offs. Although there are many advantages of working from home, mainly low operating and start up costs. There is also a unique challenge which home based business owners must face, namely how to process payments for their products and services.
Home based businesses are compelled to stay viable and competitive by offering products and services to customers online and in-person. One way to significantly boost the potential earning power is to accept credit and debit cards.
To process electronic transactions online, home based business owners must first setup a merchant account with a third party provider to establish an Internet payment gateway. Not all merchant accounts offer the same provisions to home based businesses. A large majority of providers deemed it too risky to work with new small business owners.
There are merchant account providers that charge home based businesses higher than average fees until the volume of sales reach a pre-determined limit. No matter what provider is selected there will be monthly fees associated with processing payment transactions. Check for additional charges to process mobile payments when customers pay using their Smart Phones.
On the opposite end of this spectrum from the merchant account providers who shy away from start ups, there are ones which are willing to provide premium services to home businesses. Consider the following factors when evaluating merchant account solutions:
What are the rates and fees associated with payment processing for a virtual terminal or shopping cart?
Which payment processing interface provides the most convenience for customers?
Do you need to purchase additional equipment to swipe credit or debit cards at home?
What are the setup fees to establish a merchant account?
Is there a monthly transaction limit?
Is there an annual membership fee?
Are options provided for both mobile and web based applications?
The search to find the best merchant account solution for a home based business owner starts by checking for a provider that offers a solution that matches their budget and is a suitable fit with their business goals. Some merchant accounts provide free set up to new customers, while others charge a set up and an application fee upfront and there’s a fee charged for every transaction.
It is necessary to pay really close attention to the service fees during the application process. The application process for a home based merchant account requires proof of ownership by submitting a notarized copy of the business license and DBA (doing business as) documentation. Some providers will also request references and a background and business credit check.
Merchant accounts provide all services related to processing payments online such as credits, refunds, voids or sale cancellations. The way to determine if a provider is right for you is how much they charge for customized solutions. Services should include ACH processing, a virtual or wireless terminal with affordable options for a retail business card swipe terminal.
Most banks don’t offer merchant accounts to new or start up businesses. Typically banks prefer to work with established businesses that have a large volume of sales. However, there are many third party providers which the banks have business partnerships with that offer accredited and secure credit card processing.
Instead of shopping for a cheap merchant account provider, look for one that specializes in working with home based businesses that offer processing options for ecommerce, retail and wireless payments.
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