It might seem a bit odd to consider acquiring a merchant account for your home based business; and it doesn’t always make sense. However, for many home businesses, it actually offers many advantages over accepting only cash or checks or even branching out into third party payment. Just because your business is run out of your home, does not make it any less legitimate a venture. Here are some aspects of each form of payment you may not have considered.
Third Party Payment Challenges
First and foremost, third party payments take more time. When you start a new business the odds are good you are operating on a thin margin. Do you really have time to wait until the third party gets the funds, makes them useable to you, and then transfers them to your bank account? The process will take nearly a week, under the best of circumstances.
Add to that the fact that you will pay more in fees to access third party systems which makes you wonder if it pays at all. Now, there are advantages to third party systems as well; you can accept payment from people who don’t have credit cards, for example, but it is in all probability better to keep this one as an additional tool rather than your primary method of collection.
Third Party Payment Challenges
Cash or Check
Cash is always welcome, as long as you don’t mind engaging in cash transactions in your home. If word gets out that you might be carrying a lot of cash at any given time, it can become a security risk. Another problematic issue when dealing with cash payments is that they are difficult to track – so you’d better keep good books.
Checks are better in the security sense, however, we all know how easy it is to print up fraudulent checks, how often they bounce, and what a headache they are. You have to go to the bank to deposit them and they take days to clear. Checks are easier to track, just make sure you copy each one and add the scan to a file in case you need it later on.
Many merchant account firms are now branching into home based business accounts. This helps you because you can take credit cards as payment for your products or services. While you will have your credit reports checked, as long as they are reasonable you should qualify for a basic merchant account.
Like third party payment arrangements, you will pay certain fees and you will need to make a minimal number of charges to avoid a routine operating fee, but that total is ordinarily fairly low. Once people know that you accept credit cards, your potential clientele will thrive.
The only way to know if an online merchant account will profit your business is to crunch the numbers. However, remember that the more ways you can take payment, the better you are able to serve your clients.