Merchant accounts are a necessity if you want to process credit card payments. In a manner of speaking, it serves like an account that processes your “plastic” transactions in your store. Because it is a kind of service, an account holder has to pay for certain fees. These fees can be hefty, especially when you look at its number.
This begs the question: considering that there are other options for payment, especially online, are merchant accounts even necessary, considering its cost?
When you look at the number of establishments that honor these plastics, the answer is quite simple: of course. More than 80 percent of online stores and businesses honor them. Consider the number of people with these cards in relation to those with accounts in alternative payment options, and thus it makes the merchant accounts worth it. It has also been proven that stores that honor plastics experience an increase in their sales. This is because credit card holders will not get a PayPal or Xoom account just to purchase an item from your online store, for instance. They will look for stores that honor credit cards. The same goes for establishments like hotels. Potential guests might find it tedious to deposit the room payment into the hotel’s account. It is all a matter of convenience.
But the concept of processing credit cards does not work in a general manner, as with most financial options. This only means one thing: for some businesses, honoring this type of card might not be practical. This makes merchant accounts useless.
The processing service will require you to pay monthly fees on top of the transactional fees. Therefore, if you do not make enough money on credit card transactions, the processing service makes you spend money you don’t earn. As noted before, businesses experience a boost when they start honoring these cards, but this does not work for most businesses since not most businesses really require credit card usage. This instance is actually very rare.
Just the same, for almost all businesses, merchant accounts (of course, together with the ability to process credit card transactions) are highly essential.