Merchant Accounts: The Most Overlooked Part of Scaling
By Richard Parkin
Getting ready to scale your business to the next level? Your checklist for the near future almost definitely includes establishing traffic sources, connecting with affiliates, and ensuring that your chargebacks are well within set limits.
However, there’s one piece of the puzzle that often goes unnoticed by entrepreneurs. Frustratingly, it’s one that can be extremely difficult to fix later on, and it’s one that can seriously inhibit your business potential: your merchant accounts.
On a basic level, your merchant account allows your business to process customer transactions. In application, it’s a lot more complicated than that. Like every other part of your business, your merchant accounts are optimizable, and getting them right is vital for any scaling business.
Understanding Your Merchant Account
When you sign up for your merchant account, alongside various terms and conditions, you’ll be given an account limit. For many businesses, these limits seem irrelevant at first, and can be quickly forgotten or ignored.
The second you start to scale, though, your merchant account limit becomes one of the single most important numbers for your company. Merchant account providers assign limits as a way to limit their risks – if they provide merchant processing to a business acting illegally, they’re also liable. By limiting the amount of transactions their customers can process across the course of a month, merchant account providers cut their potential losses down to an allowable maximum.
Of course, from a business perspective, the situation can look very different. Account limits place a ceiling on your success, with orders above your monthly maximum being rejected outright, with potential charges for exceeding your account limits.
Running into your merchant account limit while attempting to scale can end your business. You’re not just losing the amount you’ve spent on scaling – you’re losing the sales you expected from your scaled traffic.
Fortunately, there’s a lot you can do to improve your merchant account availability, provided you get started before you start scaling. Adjusting your merchant accounts takes time and patience – not something you can spare when you’re rapidly losing money.
Improving Your Merchant Accounts
Ready to start improving your merchant accounts? There’s a few steps you can take, depending on your current situation and specific requirements:
Consult a Merchant Broker: As an entrepreneur, you’re likely not the most qualified person to discuss terms with a merchant account provider – your skills lie in a completely different area. Talk to a merchant account broker to discuss your position. No matter what you require, you’re almost always going to get better results if you talk with a broker than you would by yourself.
Apply for Multiple Merchant Accounts: Provided your contract allows for it, you’re virtually always going to be better off if you start using multiple merchant accounts. Having multiple accounts doesn’t just increase your overall limits – it provides you with a backup option if things go wrong, gives you a way to ensure that you’re being charged reasonably, and far more.
Renegotiate Your Accounts: If you’ve used a merchant account for a long time, you’ve demonstrated that you’re more trustworthy than someone coming in off the street. You can (and usually should) make use of this trust. Talk to your merchant account provider about your current situation, and how you’d like to upgrade your account – providers are often a lot more flexible than you may expect. Again, you’re almost always going to be better off having a merchant account broker negotiate for you – don’t miss out on the benefits of their experience.