Free Merchant Account: Incentivize Customers for Cash Payments

by | Jul 18, 2023 | merchant account

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Free Merchant Account

What’s behind the success of small online and offline merchants? What took off for independent retailers in the last couple of years? Putting all pieces of the riddle, it seems the acceptance levels of technology and innovative practices improved the bottom line. The use of tech products offered respite against top brands. The markets were unstable and unfair for small and emerging players earlier. A free merchant account sums up the progressive behavior in the space. 

Talking about low-risk businesses, they have one of the best options in the form of Payment Service Providers (PSPs). A common understanding is that merchants don’t have to pay account setup and monthly fees and sign long-term contracts. Problem solved. The definition of a merchant account is a bit different from traditional ones. 

A merchant account with a PSP pushes customer convenience and compliments the entrepreneurial spirit of young business owners. Banks, on the other hand, follow a rigorous application procedure. They may qualify or fail the merchants citing poor credit history or risk value. PSPs offer an attractive deal as they make it about business growth. 

Business owners have a single expectation: A hassle-free experience. The talk of a free merchant account doesn’t end with no costs involved. They target customer service excellence, global footprint, and staying upfront on the latest technologies. The term ‘Free’ gathers no attention if the service provider fails to back it up with a list of top features. 

How to Save More with a Free Merchant Account

Merchants should consider a free merchant account as the beginning of the selection part and proceed further with the same intensity. There are no monthly fees to have one thing off the list. The payment processing part includes other fees. You don’t expect credit card processing fees to go away? Do you? It is inherent or integral to the whole credit card payment system. The only way you can make them go away is to stop taking credit card payments. What do you say about that?

Merchants should get the free part right and start thinking of other ways to maximize their earnings. Credit card processing for low businesses includes markup, assessment, and interchange fees. These costs are there. What you can do is accept ACH payments and eChecks to save money. Accepting cash payments is there, but is it favorable among customers? 

How to Save on Credit Card Processing Costs?

Tokenization 

What’s good for security is beneficial for financial health too. Visa and Mastercard offer lower processing rates on tokenization transactions to encourage safe transaction practices. Merchants having interchange plus and membership-pricing plans can avail of the benefits.    

Transaction Timeline and Batch Fees

Follow a routine of submitting transactions in a single batch at the end of the day. The timeline determines which interchange fee is charged. You don’t want to have an indisciplined approach only to end up paying from your pocket. What do you have to say about batch fees and submitting individual transactions? Probably, it is not a good idea. 

Stop Paying More with Keyed-In Transactions

Whenever the system sniffs threats or scope for security vulnerabilities, there are more costs incurred. A keyed-in transaction is the most expensive compared to card tapping, swiping, & dipping. 

Free Merchant Account: Marketing Tactics and Offset the Costs

Purchase Hardware Than to Lease

Merchants should research and study the market before making any decisions. Pairing a free merchant account with a credit card terminal on lease is the kind of mistake you expect first-time businesses to make. How do you cover the loss when the lease amount comes out to be two or three times more than the actual cost? The credit card processing sector has its flaws, like any other business. You should follow a cautious approach to stop falling into the marketing trap. 

Offset the Costs: Convenience Fee 

Business owners charge customers a convenience fee for using their preferred payment mode (Credit cards). The charge is not a part of the total transaction amount but a fixed rate. 

Offset the Costs: Credit Card Surcharging

Merchants add the payment processing fee to the client’s bill. Customers make a payment in addition to the price of the products purchased. Is it good practice? Surcharging is a complex legal process that requires intense efforts and compliance on the business owner’s part. What about your customers? What if they can visit the nearest rival store and avoid it? 

Merchants should realize a free merchant account has its paid nature. The idea is to involve customers before introducing any payment-related charges. 

Offset the Costs: Cash Discount Programs 

The best practice to lower credit card processing fees is to offer a cash discount program. Businesses encourage customers to pay by cash and receive cash discounts. Both sides win as business owners can offset credit card fees, and customers get discounts. 

Business owners must accept they need to offer a rewarding experience to break credit card dependence. Incentivize them. Make them save on every transaction. 

Conclusion:

Top Payment Gateway Providers offer a free merchant account. Is that all you need to know? Credit card processing has its costs involved. There is a fee structure. These costs are essential and integral to credit and debit card payments. The best option is to negotiate better rates and follow a system to reduce the fees. Think of cash discount programs. Your customers wouldn’t hesitate to pay by cash or alternative methods to save money. 

Business owners should select a service provider based on features, fees, and flexibility. Learn about new marketing practices. Share the news with audiences and pass on the benefits to them. It improves customer engagement and builds strong associations. Business owners should accept a free merchant account has several costs to manage the operations. They should know they can reduce credit card processing fees. Negotiate with your service provider, offset the costs to customers, or promote discounts to encourage cash transactions. 

FAQs

What is a free merchant account?

Payment service providers (PSPs) offer a free merchant account to start accepting online payments. Merchants don’t have to pay for set-up costs or monthly fees. 

Do PSPs offer a free personal merchant account?

Payment service providers offer an aggregated merchant account for free. It is not a personal merchant account, as banks offer. 

Can I save on credit card processing fees?

Merchants can negotiate lower processing rates, use tokenized transactions, and offer discounts for using cash and alternative payment methods.

Do I need a free merchant account with a bank or PSP?

Business owners can enjoy the benefits of a merchant account minus the tedious application work with PSPs. Banks offer personalized merchant accounts to cater to the rising business demands.