What Are the Benefits of a Domestic Merchant Account?

If your business has never had its own credit card processor, you might not be familiar with the concept of a merchant account, and that’s okay. More and more businesses are getting started with consumer payment processing solutions that allow for easy money transfers between individuals, and that’s all right. Those processors can be a great way to knock out a few events or for people who have a hobby business, but if you’re growing a company that you want to make into your full-time commitment, the fees they attach to transactions will start to really hit your bottom line. That’s why most businesses opt for their own credit card processor and dedicated equipment, and that’s when you need a merchant account, because it’s the account that your processor uses to render payment after receiving funds from the customer’s credit provider.

Since the merchant account is an intermediary between you and the credit companies loaning the money to your customer, this account doesn’t require you to withdraw money when it arrives. Instead, it essentially facilitates access to your funds by speeding up your receipt of them. The necessity of an account like this and its close relationship to credit card processing is why many companies opt to get an account with the same people who supply their hardware and POS support, to simplify things. That’s one good reason to consider a domestic merchant account. If your processor is domestic and you get your account through them, you’re dealing with a company who understands your financial requirements and tax obligations, because they share them. It’s also more likely their business hours are compatible with yours, so you have more access to technical support when you need it. Let’s explore a few more great reasons to use a domestic account for your merchant account.

1. Increase Your Revenue

If you don’t have any merchant account at all, you’re leaving money on the table when it comes to meeting your customers’ needs. Virtually every adult who lives independently and pays their own bills has at least one credit or debit card, and merchant accounts allow you to take both debit and credit payments, not just credit. By taking those forms of payment, you make your business more attractive to customers who don’t carry a lot of cash at once. You also increase your average sale size. The average cash transaction in the U.S. is only $22, but the average non-cash payment is $112. What goes into non-cash payment calculations?

  • Credit cards
  • Debit/checking cards
  • Institutional vouchers
  • Checks

Only the first two items are facilitated by your merchant account, but for many consumers that do want to use checks, debit cards are still a preferable alternative because they draw from one’s checking without the extra work that goes into writing a check.

2. Take Online Payments

For customers who prefer to shop online, credit is just about the only game in town that doesn’t tack on a lot of extra fees. Using ACH payments can involve lengthy confirmation sequences and steep fees, and waiting for a check to come in the mail defeats the convenience of shopping online by adding several days to every transaction. That’s just not going to work for many companies, whose sales and shipping times have to compete with major retailers who can routinely fill an order within 24 hours and ship it to them within 2-5 days. To be nimble, you need to be able to take cards.

3. Improve Your Company’s Cash Flow

Merchant accounts help your cash flow pick up because they allow you to take non-cash payments that clear to you within just a few days in most cases, sometimes within 24 hours. The increased revenue on its own will help with cash flow by increasing your volume of business, but the payment speed that comes from opting for a domestic merchant account is really what makes opting for an in-country payment processor worthwhile. The less time you have between making a sale and receiving funds you can work with, the easier it is to restock inventory and pay other vendors and contractors. A lot of the time, payment processors that are international and located abroad will take extra time to process your funds, due simply to the number of jurisdictions they have to pass through. Why take on that extra delay if you don’t need to?

Check Out Incentives and Bundle Deals From Domestic Payment Processors

If you’re wondering about how expensive it will be to open a merchant account and start processing payments, you should check out the incentives processors offer new customers. Often, you can get discounted equipment, and sometimes you’ll even find a deal on a great POS system that’s free to use as long as you commit to a contract with your merchant account provider. That can be a great way to access the machines you need without taking on any additional overhead expenses.

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