You will be vulnerable to many kinds of risks when you start a business. Like any other business, you need to be able to accept debit or credit card payments, and you have to set up a merchant account to be able to do this. Risks include that you might face less than quality merchants providers. To protect your business, you need to find out how you can avoid fraudulent activities.
Just a background on merchant accounts, opening a merchant account is the only way to accept credit card payments. A merchant account is where you can deposit funds that are processed from debit or credit card transactions. There are many cash flow tips you can maximize when you set up a merchant account for payments and these will help you have a constant cash flow.
In short, merchant accounts are for the payments for goods and services using debit and credit cards. Maintaining one can be tedious since you might need a software that has excellent security features. It can also be a bit expensive since service providers can lock you in a long-term contract and there will be an early termination fee should you decide to discontinue services with them before your contract ends.
However, this is also the only way you can accept debit and credit card payments. The best thing that you can do is to check whether its legit or not then work from there. Here are just some ways and a guide on how your business can check the legitimacy of merchants who accept credit card payments.
To know whether a merchant account is authentic, you have to know the usual tricks used for fake merchant accounts. There are many scams that were created to intentionally trick you. So, it will be very useful for you to learn what scams are out there. To give you a clearer idea about the kinds of scam you may encounter, here are just some of them:
If you’re in the business for a while now, you would know that nothing comes for free. As Adam Smith says, “There is no such thing as a free lunch.” Usually, when you see an offer for free merchant accounts, this is already a red flag. It’s definitely one of the most common scams on the internet for merchant accounts.
Another common scam circulating is merchant accounts that will ask you to pay a fee a fee for refunds or cash deals. To lure you into paying, the merchant account might offer you a refund by crediting it into your account. Don’t fall for these kinds of tricks. Always transact with reputable merchants such as Wave to avoid getting these kinds of deals and be scammed overall.
Another thing to look out for is how they will ask for your personal details.. Legitimate merchants will have a proper procedure in getting your details, and if a merchant asks for it in a suspicious way about such things it is guaranteed that they’re not legit; it is one of the red flags to look out for. Always be wary of sharing information as this can lead to identity theft.
To help you evaluate whether or not the merchant can be trusted in accepting credit card payments, you need to do extensive research. Check out industry blogs on payments, their social media accounts. Chances are that you will start finding reviews and testimonials from their customers. If there has been any unpleasant experiences, customers won’t hesitate to write all about it online and expose the merchant for who they are.
Legitimate websites usually have their own domains and won’t disguise itself as a sub-domain website. You need to make sure that you don’t fall for sub-domain websites or pop-ups. A subdomain website is a domain that is part of a larger domain. These kinds of websites usually looks like as “insertwebsite.com/merchantX” or some looks like a misspelled website.
You should avoid these as they can be a phishing site. Also known as spoofed website, these websites tricks you into believing that you’re on the legitimate website. What these usually do is, it tries to steal confidential informations from you; such as account passwords.
It’s true that every business needs to use a merchant account to be able to accept debit or credit card payments. To run a successful business, you need to make sure of the legitimacy of it for a smooth transaction. Just follow the guide mentioned above, and you will be able to save your business from illegitimate merchants accounts.