Benefits of a Merchant Account

Written by Jamal Gary

November 15, 2022

In this age of technology, we know that there are multiple ways of doing business. Society has come a long way from the days of having to count by hand to now putting money into machines and it does all the figuring for us.

There are still businesses who only operate on a cash basis. But now we will talk about why having a merchant account is an asset for your business.

What is a merchant account?

Let’s start at the beginning, but in order for me to tell you why it’s an asset to your business, let’s break down what it is. Merchant accounts allow businesses to accept and process electronic payment card transactions. These accounts require a business to partner with an acquiring bank who makes all communications in a payment transaction.

Is it Essential?

Yes, while there are businesses who solely use cash. However, having a merchant account will open up more opportunities and add value to your company.

Why Should I Get One?

Here are some benefits of having a merchant account:

  1. Accept credit cards- One of the most important benefits is the ability to accept credit and debit cards. These cards have grown in preference with customers; gaining ground as the new norm. When businesses keep the customer in mind, they eliminate any friction in buying or payment processes. This can help get new customers and improve cash flow.

  2. Increase Sales- Customers spend more when given the option to use credit cards over cash. Data shows that 83% of small businesses that accepted credit cards saw an increase in sales.

  3. Better money management- Accepting credit cards and moving to online payments streamlines the way your business handles transactions. Electronic payments will help you be organized and allow for better cash flow management.

  4. Avoid Bad Checks- By using merchant accounts and accepting electronic payments, your business can avoid the hassle and costs associated with bounced checks. Also, if you pair it with a complete payment system it can accept recurring payments for services you provide on a repeat basis.

  5. Customer Convenience- Convenience is key. Having a merchant account gives customers flexibility to make purchases in different ways. Whether with credit or debit cards, online payments, recurring billing. The customers will enjoy their experience with your business. They can shop how and when they want.

There is a saying in business: ” The customer is always right.” We talked about the choices businesses make while keeping the customer in mind but there are businesses who only operate on a cash only basis. Let’s talk about them.

Here are some examples of cash only businesses:

  1. Baker

  2. Coffee cart

  3. Delivery or transportation service

  4. Farmstead or nursery

  5. Flea market vendor

Cash only benefits

  1. Receive money fast: No waiting period. Credit transactions can take days to process.

  2. No credit card fees: Credit transactions impose fees. You also must buy equipment to process credit cards. When a customer swipes their card, a fee is attached.

  3. No credit card fraud: If someone uses a fraudulent card. Credit card companies require the business to refund the money. This is called a chargeback.

The downside of having cash only business is not being convenient for customers.

Having a merchant account gives the customer more options. However, as we mentioned, there are other businesses who operate on a cash only basis. Having more than one way to do business helps customers pick an option that works best for them.

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