When going into business, you’ll need to find a solution that allows you to accept credit card payments. Many out of box solutions are available such as Square. These simple solutions allow you to quickly and easily start accepting credit cards. However, they do have their downside. Lets take a look at the main differences between Square and an actual merchant account.
Benefits: Square is incredibly easy to setup and any business can use it. Even if you’re a high risk business, you can begin accepting credit card payments with this option. The pricing is simple as well; 2.75% per transaction or $275 per month for businesses that get less than $21,000 per month.
Drawbacks: Square has a terrible support team; you can only contact them via email. This is awful since you’re essentially working with money and customers are involved. Lets say you accidently enter the wrong amount and need to cancel the transaction, you would have to email the support team and wait several days for a response. This creates angry customers and loss of sales. Another drawback is that they accept any business, but since many high risk businesses use Square, they randomly place funds on holds when transactions seem suspicious. Their algorithms decide when funds get frozen and since there is no phone support, you have to wait for days just to know what’s going on.
Benefits: Merchant accounts normally provide 24 hour phone support, which makes dealing with issues a breeze. Their agents normally setup your account and provide you with on-going personalized support. If you receive high-volume credit card transactions on a monthly basis, you will also end up paying much less than the 2.75% per transaction that Square takes. There are also bad credit merchant account instant approval services available and solutions for high risk businesses.
Drawbacks: Some merchant processors provide confusing statements. Also, you may find it difficult to get a merchant account directly through a bank if your business is considered high risk. However, there are high risk merchant account solutions available.