A New Merchant Account: Your Answer to Business Issues?
How much you’re charged is determined by how you process transactions and the types of cards that you accept.
When you sign on to a new merchant account, there are a few things you should consider before using it. A new merchant account is a great way for your business to accept credit and debit card payments, and to help your company grow, but take into account the details of your new merchant account contract, and be wary of several common issues related to new merchant accounts.
Ironically, when a credit card transaction charges at a higher rate, it’s considered downgraded, and this is a concern for new merchant account members. But why does a transaction charge more and downgrade? There are a couple reasons: the way a transaction is processed, and the type of card involved.
While you may have little control over downgrades due to card type, you can limit downgrades that are a result of processing errors. Two common processing errors leading to downgrades are not clearing your card batch daily, and chargebacks; new merchant account members, use caution!
Credit card batches must be sent to the processor within twenty-four hours, or all transactions in the batch will downgrade. Not clearing your batch daily can be a very expensive mistake, so pay special attention. Providers offer something called auto-batch close; this feature will automatically close credit card batches when necessary.
Often, owners of new merchant accounts don’t fully understand a chargeback: when a cardholder disputes a transaction with his or her card issuer; the merchant involved will get a notice regarding the dispute. If you experience any chargebacks, deal with them quickly. Merchants have a limited time to respond to a chargeback dispute. If enough time passes, the cardholder wins the dispute by default, so stop chargebacks before they happen. New merchant accounts often confuse members, but know and understand the terminology, and you’ll be fine.
For many businesses, credit card processing costs a big chunk of their monthly expenses. Especially when you get a brand new merchant account, carefully inspect your statement every month and scrutinize the charges. If you don’t understand the statement, call your provider and ask them to explain everything in detail. A new merchant account can be overwhelming, but try to use your new merchant account, along with the information you’ve gathered today, to your advantage.