A home business merchant account is necessary for any home based business that will be accepting debit or credit card payments. Virtually every home based business will need the ability to accept payments through some electronic means, be it a wireless terminal, online payment processing, or a MOTO (Mail Order Telephone Order) credit card processing system. The Merchant Account is the bank or independent sales organization that will be accepting the business payments for all purchases of your products and services. Depending on the method of payment a payment gateway, shopping cart software, and other ecommerce tools may also be needed.
When it comes to finding home business merchant accounts the business owner may need to look for a high risk merchant account provider, typically a merchant account provider is taking more risks with a home based business. A home based business often consists of a single individual with no business experience or business credit history to show how stable his/her financial assets are. If the business owner has previous business experience or has had a merchant account with a previous processor this may have some impact on how easy it is to open a home business merchant account.
The first thing a business owner needs to decide is how he/she wants to accept payments. Will all orders be placed online through shopping cart software, PayPal, or some other online payment processing method? Or will the business have customers that come directly to the home. Will the business accept mail or telephone orders? Each of these things will help determine the type of credit card processing tools a business will need. Some things the merchant account provider may need to know include how long the business has been open, credit and financial history of the business owner (unpaid loans, bankruptcies, liens, judgements, etc), and any previous merchant account providers the business owner has dealt with.
Be honest about personal and business financial history, it is easier to explain a black mark on your credit up front than to have it thrown in your face later and have to try to explain why you were “covering it up”. Expect to pay slightly higher fees, because a home based business is a more “high risk” type of business, most merchant accounts will charge slightly higher rates for their services. Be sure to ask about discount rate, transaction fees, equipment fees and charges, minimum or maximum volume allowed, reserve fees, chargeback fees, as well as what type of ecommerce features and tools the merchant account will support and work with like shopping cart software, payment gateways, virtual terminals, and the web hosting provider your business will be using (if applicable).
Read some merchant account reviews to see whom other business owners use for their merchant account services and then talk to the company yourself. Ask every question you can think of about fees and rates charged for any type of service or purchase or circumstance that you can foresee ever happening. Find out how the company deals with chargebacks, what kind of fraud protection they provide, and ask for a disclosure of ALL rates and fees that may be charged, read through it all, even if you think most of the circumstances will not apply to your business. Businesses often face a number of situations that are not expected or anticipated.
Check out the merchant websites listed below to learn more about these highly recommended merchant account providers: