Third Party Merchant: To be or not to be?

That is the question…

To be or not to be a third party merchant? Well, first of all have you a choice of choosing? It’s sometimes frustrating to get a merchant account due to some problems involved. As a rule, credit card processor service providers refuse to service high-risk, immature, unaccredited, or some specific types of business industries, like pharmaceuticals, tobacco and alcohol. So the only way out would be to get a third party merchant account. But, if you have the choice of getting a third part credit card processor or the usual credit card processing service provided by merchant accounts, what will your choice be?

Let’s dwell on the advantages first, and then we’ll get down to the choosing:

• Versatility. Third party merchant accounts, as a rule, process more kinds of brands of credit and debit cards. The amount of clients supported worldwide might be up to three times higher than the amount of clients supported by a merchant account credit card processing.
• Less number of fees. Yes, in fact, third party merchant accounts involve no setup fees, as a rule. Third party merchant accounts have (as a rule again) a monthly (gateway) fee, and transaction fee (usually including third party merchant commission). Don’t forget taxes though.
• Instant statistics. Third party merchant accounts provide statistical information, such as number of transactions (filtered by date, time, country, and so on), which is provided instantly online, and is updated in real-time. This makes the possibility to process statistical information, which may improve your business strategies if made correct use of, at any time, any day, in just a few clicks.

Of course third party credit card processing has a few disadvantages too, like higher transaction, commission and gateway fees. But, we must not forget that usual merchant accounts involve other fees such as membership, insurance and other extra fees. So on the whole you may be eligible for saving using a third party merchant account.

Now to the choice between being a having a third party merchant account and a merchant account. The choice, if there is one, depends on the type of your business, funds involved, clients involved, and other services involved. You shall need to do a bit of subtraction, multiplication, division, and addition, nothing really tough though. After reviewing and getting the full picture of your incomes versus your merchant account expenses.

Third party merchant accounts are the best solution for new businesses, as fewer expenses are involved to start accepting credit cards. When the business has big incomes, and big transactions, though, it is advised to get a merchant account, if possible.

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