By Janet Attard

Having difficulty finding and choosing a bank or financial organization to process charge card sales for your online pharmacy merchant account?

You aren't alone. Although there are a number of financial services now offer merchant accounts to home based, mail order and Internet businesses, finding the right one for your small business is still a difficult task, fraught with many pitfalls, both before and after you get the account. 

For starters, many banks won't offer merchant accounts directly to small businesses. Instead, small businesses need to go through third party providers who secure the merchant account, for you.  Each of these third parties may have different fee structures and somewhat different rules.  

To complicate matters, if you are processing orders online, there are several online gateway systems to process credit cards. Whatever shopping cart software you choose has to interface with these gateways. Not all shopping carts work out of the box with all gateways. Thus you need to be sure the shopping cart you plan on using will work with the merchant card you choose. 

Rates and fees

Many factors can influence the discount rate and other fees you pay for the privilege of accepting charge cards. Among those factors: the length of time you have been in business, the percentage of your sales that are made over the phone or the Internet, the type of business you are in, the number of years you've been in business, your personal credit rating, the average dollar amount of each sales transaction, the total dollar amount of sales per month. Service fees tacked on by the third party providers or by their sales people, can also add to your costs.

Some companies were charging as much as 8 percent discount rate. While poor personal credit or the type of business you run might possibly cause you to have to pay that much, do not agree to such a high a discount rate until you have personally determined that no other company will process your charges at a lower rate.

 Even though banks in many parts of the country still don't want to deal with home and small business merchant accounts, it is not as difficult as it once was for new, home mail order businesses to get merchant status - at least not if the owners have good personal credit and aren't "adult" products or services.

Some companies advertise discount fees less than 2 percent. Usually these lower fees are for swiped transactions (sales made by running the customer's credit card through a machine). 

Therefore, in comparing processors, be sure to find out what all of the fees will be. Compare not only the application fees and the discount rate, but also the initial cost of equipment, transaction fees (the fee you pay on top of the discount for each transaction you process), monthly minimums, voice verification charges, address verification (if extra) fees, monthly statement fees, and any other costs you will incur. A difference of 10 cents on the transaction fee is equivalent to a one-half a percent on the discount rate if your average sale is $20.

Some companies require you to maintain an account in their bank in order to process cards. Read all such agreements closely to determine under what circumstances the bank can put a hold on your account, and how much of the account it can hold back. Find out how often you can withdraw money from such accounts, and check with your own local bank to find out how long it will take to clear checks drawn on the merchant bank.

Pay close attention to the cost of equipment or software for processing the charges, too. Identical software and comparable hardware varies in price by as much as $600 or more depending on who you use purchase it from.

If at all possible do not lease equipment or software. Buy it at the start. By leasing it you often set yourself up for three or four years of noncancellable lease payments and wind up paying thousands of dollars more than necessary.

Be sure to read ALL applications forms and contracts mailed to you carefully. Read all of the small print. Several companies will charge you if you want to stop processing charges through them in less than two to three years.  That cancellation fee is separate from any noncancellable lease clauses for equipment.  If you are planning to sell via mail order, look for information on the application form and contract about the percent of transactions you can process as phone orders (non-swiped). What the salesman says on the phone may NOT be what the application actually says. If there's a dispute, what will stand up is what is on the printed contract you get, not what you say the salesman told you.

Check to see under what conditions the company can terminate your offshore pharmacy merchant account, and, whether there are monthly minimums or maximums.

The Application Process: What to Expect

Some companies will want the right to send a representative to your place of business (including your home if that's where you do business) to take a photo of your office. This is to verify that you are at the location you say you are. Some will accept a photo of your office instead of the onsite visit.

Depending on which company you are dealing with, you may have to provide any or all of the following: copy of your business license or certificate of doing business (dba); profit and loss statements; copies of previous years' tax returns; photo of your office to get approved for your pharmacy merchant account.

All will require two-way access to a bank account if you are accepted. This allows them to deposit funds into your account and also allows them to withdraw them if there are charge backs.

PharmacyMerchantAccounts.com has the right pharmacy merchant account for you APPLY HERE