Personal Merchant Accounts

When it comes to traditional merchant accounts, you have to be approved. There is a whole process to go through. If your business is high risk for fraud and/or chargebacks, you may not be approved. Additionally, if you have a low volume of sales, you may not be approved for a traditional merchant account. In such cases, it might suit you better to get a personal merchant account.

What are personal merchant accounts?

Personal merchant accounts are those that are set up for people, rather than businesses. It is an account that allows individuals to accept credit card payments. This is an advantage because it allows you to be competitive, and it makes getting payment for business transacted over the Internet much easier. For many people who sell online through places like eBay and Amazon, this means setting up a personal merchant account through a service like PayPal or PayNow (or any number of other online merchant accounts).

Personal merchants accounts can be useful, since they allow you to accept credit and debit cards online. Additionally, there are now online personal merchant accounts that allow you to accept cash or to bill customers later. In some cases, it is possible to accept what is known as an “e-check” and get money transferred from the person’s checking account. With online personal merchant accounts, there are many possibilities.

Costs of personal merchant accounts

It is important to note that some of the costs of personal merchant accounts are higher than those associated with business merchant accounts. Because a personal merchant account is considered a bigger risk, the discount rate and the transaction fee may be higher than what is charged to businesses. But there are fewer costs in some areas: For the most part, you will not pay gateway fees, statement fees and minimum transactions fees, as well as other fees, when you use a personal merchant account.

However, if you do set up a personal merchant account, you should be aware that you may be charged fees for foreign currency conversions. You normally have to state the primary currency you will use, and if someone from another country (this is more likely if you are selling things online) wants to buy – and uses a different currency – you may have a portion of the transaction taken as a fee for converting the currency. However, most of the time you can avoid this by only accepting payment in a specific currency. But doing this might limit the customers that buy from your business.

You should, of course, evaluate the benefits of using personal merchant accounts versus traditional merchant accounts and integrated merchant accounts. Consider what sort of services your business needs, and how often you expect to use them. For the most part, you can start out small with a personal merchant account in order to build your credibility as a business and get the sorts of services you need. As you grow, you can change the type of merchant account you need to reflect your expanding business.

There are many choices, you should do your research to ensure that you are making the best decision for your business.