Merchant Account VS. PayPal, Are You Choosing the Right Account Type?

Dec 13, 2016

The more payment options your business has, the better. Your customers need to be able to pay for your goods or services using their credit cards. In order for you to accept them, however, your business will need to obtain a merchant account. Online businesses also require a payment gateway to complete a transaction (a technical component that forwards credit card information from a merchant account to a bank account).

Knowing what processor you should go with can be a very overwhelming task. This decision is even more complicated if your business is considered to be high risk by traditional processors; this includes online businesses, small businesses and startups. They will likely request business plans, evidence of investment capital or years of audited accounts. After receiving extensive documentation to prove that you are viable – and taking up hours of your time you can’t get back – they can still turn you down.

Thus, more and more merchants are turning to alternative processors for their business needs. Even so, many are left wondering if they’ve chosen the right account type. When it comes to merchant accounts vs. PayPal, for example, which option is really offering the most to your business?

PayPal as a Merchant Account

PayPal is great for online purchases and sending money to friends and family. However, it is not your best option for a merchant account. While many merchants choose PayPal, it can quickly turn out to be a horrible mistake. At first, it seems like a very accommodating choice. Setting up an account is simple, quick and costs nothing. Merchants go with this option because a merchant account seems like it has a much longer process in comparison.

In reality, PayPal has very stringent rules when it comes to acting as a merchant account. PayPal can also freeze your account for any reason. One suspicious activity – like a chargeback or challenged charge – can leave you in a horrible position. Once your account is frozen, there’s no way to access your money, refund money, or obtain customer information.

Merchant Account Services

It’s true that a merchant account with a traditional provider is not always an option. However, alternative providers – like EMB – specialize in working with business types considered high risk. In addition, the team at EMB has years of experience in helping merchants struggling with bad credit; EMB’s services can actually help build personal and business credit over time.

EMB offers merchants chargeback protection and prevention programs, allowing merchants the opportunity to be proactive in the process. Merchants also have access to multiple gateway solutions, instance check processing and business funding. EMB’s merchant solutions are tailored to all types of businesses, including: gaming, nutraceutical, tech support, travel, telecom, ebooks, electronics and many more. Whatever your business type, you can find solutions that are specifically tailored to your business’ needs.

The application process is quick and painless. The process can be completed in a few minutes, and merchants hear back in as little as 24-48 hours – if not sooner. With a proven platform and superior support, merchants don’t have to worry about having their accounts frozen.

While PayPal may work for a business just starting or one that experiences low-volume, real growth is going to require so much more. A merchant account can save money, offer chargeback protection and provide flexibility. Ultimately, customer management will be easier and more efficient.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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