Almost everything you want or need can be sourced online. As a business, your reach now stretches around the world but you need to ensure that you get paid and that you have easy access to your money when you need it. Many online businesses fail because they don’t use the right payment platform.
Businesses are no longer restricted by their geographical location. In the last couple of decades, markets have gone from local to global and this has opened up a host of possibilities for businesses, but it has also brought with it several challenges. When you are doing business around the globe or across the country you need to ensure that you are using the best payment platform for your business and guess what, it probably isn’t PayPal or Stripe. Before you sign up for a payment platform you need to understand what you are signing up for.
What is the difference between a merchant account and a payment gateway?
A merchant account is a type of bank account that allows you to accept payments from debit and credit cards. When a customer makes a payment the funds are deposited into a merchant account before being transferred into your business bank account. Transfers are typically made on a daily or weekly basis depending on your merchant account provider. Traditional merchant accounts and internet merchant accounts operate in the same way but the fees for internet merchant accounts are usually higher because of the high risk associated with online payments.
A payment gateway does not transfer funds from one account to another, it simply authenticates your customer’s credit card details. The payment gateway securely transmits credit card data between your website and the Acquirer for authorization. The payment gateway and merchant account work hand in hand and if you are accepting credit or debit card payments online or via a mobile device, you need a payment gateway.
Is your PayPal account a merchant account?
No, your PayPal account is not a merchant account. PayPal is a third-party processor or aggregator. This means that when you open a PayPal account you do not get your own, unique merchant account number and all seller accounts are processed through one large merchant account. This is the same way that Square and Stripe operate. While third-party processors are convenient for start-ups, they do come with higher risks for the merchant. PayPal, Square and Stripe do not vet applicants as thoroughly as merchant account providers and this means that they are more likely to freeze your account if you make a transaction that they perceive to be suspicious or high risk.
PayPal’s customer service department is also practically entirely automated so once your account has been frozen, it is virtually impossible to get it reversed. If you are a small or new business this could have a serious impact on your cash flow and many online entrepreneurs have had to close their businesses because of this practice.
How a JJS Global merchant account works
Third-party merchant accounts or aggregators, like PayPal, Stripe, and Square use one merchant account to process transactions from millions of businesses while a traditional merchant account is unique to your business and you have your own account number. There are several advantages to having a merchant account and the biggest one is the vetting process. Now, this may seem counter-intuitive, but the vetting process actually works in your favor if you are a legitimate business that wants to offer your customers quality products at market-related prices.
Third-party payment processors balance the risk of honest entrepreneurs and businesses against conmen, money launders and fly-by-night businesses that are going to shut up shop before customers can ask for refunds. But when you apply for a merchant account from JJS Global, as the account provider, they will put you through a proper vetting process and look at the risks associated with your business and your industry. JJS Global will carefully study your business model and assess your credit history as well as several other factors before approving your account. This means that you will be working with a company that understands the inherent risks associated with your business and if there is any unusual activity on your account, they will investigate rather than simply freezing your funds. The process to obtain a traditional merchant account through JJS Global is more intense than the vetting process for a third-party aggregator, but it is worth it for your own protection and peace of mind.
Third-party aggregators work as an entry-level option for accepting credit cards but if you are doing large volumes of sales with high turnover or you are in a high-risk business category, then your business needs a JJS Global merchant account.
