As we all know the main definition of merchant account online is a classification of online account connected with a financial firm or bank that permits an online merchant account holder to have business transactions using debit card or credit card. Given that there are so many choices for online business transactions and merchant account online is a no exemption for this budding industry.
Now one of the important aspects that determine the variety of merchant service provider is the rate related with the merchant account. This rate might vary from service provider to service provider are the rates are generally high. But a lot of online market firms have the tendency to be uneasy regarding these accounts. Of course for them to sore high when it comes to business matters merchant service providers or financial firms always coming up with pioneering business tactics. For example is providing a free merchant account. Now the essence of this article is to compare the different factors regarding free merchant account and the paid merchant account.
Now let us first evaluate what can a free merchant account showcase. A free merchant account is an online account where in the merchant account service provider doesn’t accumulate any membership charges from the account holder or the merchant nor charge any set up cost. Meaning to say the merchant will not pay anything for him to file an application or to sign up for an account. He will also get a gateway details and set up instruction free of charge. Since this is the offer seems good many merchant tend to sign up with a free merchant account and is much better compared to paid merchant account. But these accounts have their own corresponding advantages and disadvantages. That is the reason way the merchant must know about this details before choosing from paid account or free account.
Nowadays nothing comes for free right? If the merchant choose the free account the merchant will not spend anything from it. But, the disadvantages are huge. These include higher processing charges and chargeback rates that are much more than the costs charged on a paid account. This is done by the service provider for them to cope up from what they lost on the free registration process. For example the merchant has a transaction done amounting $100. The service provider will deduct the charge the costs and deposit the remaining amount to the merchant’s account. The charges will be like this the %5 of transaction amount which is $5.00+$1.00=$6.00 that means for every $100 transaction he will loose $6.00 that will be for the charges. Do you know that service provider tend to charge the merchant for as high as 14% on free accounts? They also lack customer and technical service so your security can be compromised.
Now let’s talk about the paid or commercial account. The paid account charges you less compared to free accounts. So if you are being charged lesser you will save more. Think about it. Paid accounts can avail the advantages like lower processing charges plus a secured business transactions and you also have rewards which free account don’t offer now it’s up to you to decide what suit your online business best.
