Third party payment accounts can have some benefits to entrepreneurs looking to do business online. A third-party processor will allow you to accept payments without actually having to open up a merchant account online yourself.
Whether or not this is the best option for you and your situation will depend largely on how many transactions you are expecting to make on a daily basis. When compared to the services available to merchant account holders there are some important advantages and disadvantages that you as an entrepreneur should be aware of.
Advantages of third party card processing:
Low price — obviously the first advantage of using a third-party processor will be avoiding the large costs associated with the merchants account and the payment processing company. For this reason, the entrepreneur and most startups looking for a cost-effective way of doing upfront business will find this method very attractive. Know How To Open A CBD Oil Merchant Account: A Simple Guide
Simplistic Setup — the merchants account takes a long time and process to set up just right. There is paper work and details that might even require a legal head to fully understand. The third-party processor doesn’t require any of this and offers a plug-and-play type setup process. You could be online by sundown.
No Monthly Fees — This is another point that makes the third party processor and attractive idea. There are no monthly fees. From PCI compliance to the service of dedicated gateways there will several important fees for the online merchant.
No Minimums — On the same idea as the last point, there are no minimum transactions needed for the third party processor to stay open.
Disadvantages of third party payment processors:
Then there are some important reasons that the biggest and best companies don’t always rely on Third Parties to process their credit card interactions. While this is not to say that third party processors aren’t reliable or trustworthy, there are some important reasons a serious business needs a better payment system.
Lack of customer service — While it can be difficult and even frustrating to deal with customer service reps, there is a certain degree of comfort in knowing there will be a solution to your issue. Third party processors have a very business-like approach and the help you can expect is pretty cut and dry. There will be considerably more flexibility and plenty more options available to those with the merchant accounts.
High transaction fees — While there are costs that make up the expense list on both sides, one place where the third-party processor is quite expensive is in the transactions fees. These fees can be as high as 3% of the transaction value and this can add up considerably. Know about CBD Account Benefits If You Sell Regularly .
Lack of a sense of professionalism — While there are plenty of very trustworthy and professional third-party processors, and businesses based on them. There is a sophistication and prestige to those brands that don’t use the regular transaction venues and this is insanely attractive to several demographics. Read about credit card processing .