Deciding on the Best Merchant Account for Your Local Business

by Simon Hopes Author

It’s no secret that local businesses are on the decline. Due to the proliferation of ecommerce and the rise of multinational corporations, local businesses have a harder time than ever in competing and staying afloat. However, one area where small businesses have an advantage is in their customer base. Unlike ecommerce shops and large corporations, local companies have customer loyalty and likely have a built-in base of customers to sell to. However, when they sell, they also need to process payments for their clients. Depending on the types of transactions a local business is performing, they may want to opt for a different type of merchant account. With that in mind, here’s what a local business needs to be looking for in a merchant accounts provider.

The Types of Merchant Accounts for Small Businesses

There are many different types of merchant accounts. The first one is a traditional account. This is best for local retail stores that use a point of sale system to process their transactions. This account has low risk, as it’s unlikely that anyone will return what they’ve bought from you. However, if you run a local business with a high rate of return, then you may want to opt for a different type of account, as the chargeback fees can be hefty with a traditional account.

The next type of account you’re going to want to look into is an internet-based merchant account. This only makes sense if you are doing a lot of business online, even if you have a traditional brick-and-mortar operation. With this type of account, you should expect to pay higher fees than a traditional account, although they are not excessive. This is because this type of merchant account allows for online transactions as well as in-face interactions. There is inherently a higher risk of chargebacks with online purchases, as it is estimated that over $40 billion of ecommerce merchandise is charged back per year. This is particularly the case with B2B operations, health and beauty stores, and home and kitchen supply merchants.

Finally, you may want to consider a wireless or mobile merchant account. This is preferable if you don’t have a fixed business location and frequently sell products and services at conventions or industry events in your local area. If this is the case, you want to make sure that you can process payments on the spot, and a wireless merchant account can help you achieve this.

Ultimately, it’s up to you to decide what the best merchant account is for your business. However, the aforementioned options are likely the best fit for a local business that is either looking to keep their merchant account fees down, or is looking for the flexibility and adaptability needed to process payments on the go. Whatever the specific needs of your business are, choosing the correct merchant account that aligns with your goals is a key factor in succeeding as a local business and rising above ecommerce stores and large corporations.