HOW TO SELECT MERCHANT ACCOUNT AGENTS

Banks are the best points of contact for knowing more about the functioning of merchant accounts. They can explain about the fees and though they are not into accepting accounts directly, they can refer agents or service providers. The characteristics that are sought after in agents are financial stability and the need to have been part of the business for a couple of years or so. The bank is not part of the risk that is inherent in the system and it acts as a depository only. The funds that result from credit cards usage are deposited in the Merchant’s bank.

Some feel that is better to access direct providers instead of dealing with agents so that things become easy and straight forward. The different steps of credit card usage are provision of software for accessing the generation, process and validation of credit card usage. The agents get their revenue through commissions.

Different people have different comments on accepting the services of agents for choosing facilitators. Some are of the view that by using agents alternative options and offerings are flexible. Some firms are considered to be direct entities in comparison to agents. Some of the direct entities are ECHO and Alliance. These are sales firms that process the transactions of the clients using a specific bank. They have prior arrangements with the bank for this. They also hire sales contractors.

They request the clients to have a minimum balance in their accounts; there is a monthly fee that is charged if the balance is not maintained. Agents ensure funds transfer automatically to the business account of the merchants and because of this there is no need for a check or some other account. The funds that are associated with the usage of credit cards of the customers are deposited in the account of the merchant directly and that too within a period of 48 hours. Most of the merchants have a preference for automatic deposits because they do not have to remember the transfer of funds into the business account.

Coming to rates of discount, it is the amount paid by the merchant. 1.5 % is considered to be a good rate; lesser than this value too is good for high volume operations that deal with retail trade. The rate applied is best since there is less chance of fraud. For small businesses the typical rate is 1.5 % to 2 %. Higher rates of 2.25 % to 2.5% are applicable for Phone/mail order business.

The agent should be registered and should follow the rules and regulations put forth by MASTER CARD/VISA. He must have sufficient knowledge and should have the capability to program merchant terminals. Agents must have licenses, FAX and phone numbers and a website. He should provide the name and contact details of his processor, if asked.

Thus, the agent fulfils needs of software/systems and equipment. He should be able to provide purchase prices of the equipments. He should be able to fulfil leases which may be 1 or 2 years.