A Mobile Merchant Account
Do you need a merchant account to sell on your phone? The answer might surprise you. Mobile commerce is booming in the era of apps, but there are still many barriers that limit mobile business success. This post will help educate you on the different types of merchant accounts available to support a mobile business, and provide resources and links to easily compare rates and features.
The first thing we’ll do is make sure that – at least for now – we’re not missing anything. Before diving into the details about how a mobile merchant account works, let’s make sure we know what “mobile commerce” really means.
Understanding Mobile Commerce
To get started, you’ll want to read the perspective of a mobile merchant account provider. We’re going to draw on the experiences of IVM , a mobile merchant account vendor that works with businesses like Amazon, Groupon and Coca-Cola to provide merchant accounts tailored for their needs.
The IVM Mobile Commerce Platform is designed to break down the barriers that prevent people from selling products on their mobile phone – whether they are big corporations or small businesses. A common problem is that small businesses usually can’t afford the monthly fees of traditional merchant accounts, while big companies have grown more comfortable with switching between different platforms as they work on different technologies.
The IVM platform does not require a new credit card and is upgradeable at any time. It’s also an open source platform, truly portable and easily customizable for your specific needs. We would recommend you give it a test drive by signing up here.
IVM Mobile Commerce Platform
What sets IVM apart from traditional merchant accounts is the ability to sell on multiple retail platforms without having to re-establish accounts on each one. The IVM mobile commerce solution is designed to allow you to sell physical goods with 1-click shopping on any channel, using any channel – whether that’s Amazon, eBay, your website or local brick-and-mortar stores.
Here’s how it works:
A single, easy-to-manage core account enables you to seamlessly integrate your payment options with any retail channel. This high level of efficiency eliminates the need for multiple business and transaction accounts, freeing you up to focus on your core business.
The system is designed to be customizable. As a result, you can build whatever functionality you need into your mobile commerce solution. You can also build in multi-currency functionality and integrate existing ecommerce platforms like Magento, BigCommerce or Shopify. The platform supports over 15 gateways, including PayPal and Google Checkout (now discontinued).
The IVM Mobile Commerce Platform costs $89 a month for all the functionality described above, with $1.50 for every successful transaction. The platform supports all standard features of a merchant account and includes support and training.
This is not a standalone solution, but instead ideal when used in conjunction with other solutions to create customized payment processing solutions. It’s also great as a replacement to traditional merchant accounts, which can be too expensive for small businesses or require prepayment upfront and monthly fees.
Merchant Account Types
Now that we’ve covered the basics, let’s talk about merchant accounts in general and what they allow you to do. There are three main types of merchant accounts:
Payment Card Processing – This type of account is designed for sellers who accept credit card payments. It’s common for these accounts to offer extra features like authentication, chargeback protection and recurring billing. Most likely, the account you need is a domain-branded payment processing account ( PayPal Business, G2), which supports dozens of countries and currencies.
With a domain-branded payment processing account, your customers will be able to pay with a credit card or debit card directly from their bank accounts – even if they don’t have an online bank account. This removes the need to set up a place they can pay your company, and also allows you to have access to the full amount of money in their account.
The advantage of this type of account is that you can accept payments on multiple platforms in different countries without having to take on any additional hassle. This is a huge time-saver and can cut down on the risk of accepting payments.
Merchant Account – With a merchant account, you get all the advantages of a payment processing account but you must sign up for an external processor who, in turn, provides access to the bank card processing network. You’ll pay a fixed monthly fee and get low-interest financing through debit or credit cards accepted by your processor.
These types of accounts are useful if you have some type of existing relationship with the bank that processes your credit cards – such as having a corporate cardholder account with them. It also simplifies things because you’re not giving out your customer information every time they make a purchase.
Merchant Account Plus – This is the most popular choice in mobile commerce because it turns one payment processing account (PayPal, G2) into a full-fledged merchant account. That means you can manage everything you need, including issuing orders and shipping without having to deal with additional processors or banks. However, for this to work effectively, you’ll need to sign up for the Merchant Account Plus card program.
This program is still new, which means there are some important limitations and risks. IVM would recommend that your business plan includes contingency plans in case things go awry with the process or a failure of the marketplace.
Fees
As we mentioned, merchant accounts are based on a service fee or setup fee and a monthly fee. The fees vary by account type, relationship with the processor and other factors. The fees also change frequently, and IVM can help you find the best rates on our merchant account comparison site (see below).
Your Choice of Merchant Accounts: Quick Comparison Service Fee Monthly Fee Level Ground Shipping or Free Shipping No extra charges Free Ground Shipping Applicable if shipping address is different from billing address Free International Shipping No extra charges Free International Shipping Applicable if shipping address is different from billing address
In addition to the monthly fees, there are transaction rates that depend on each channel you want to use. If you’re only accepting payments from other countries, you’ll be charged a higher fee than if you also accept payments from within the U.S.
There are also “per item” fees for each transaction that depend on the type of product and how it will be shipped. For example, shipping (and handling) costs can vary based on how many items are sold and whether the order is being shipped domestically or internationally.
Many merchant pricing plans include free shipping or free ground shipping options. However, in these cases, your customers will pay a higher price per item to cover these additional costs and still be competitive with online sellers that offer free shipping on all orders over a certain dollar amount.
Conclusion
After we’ve explained the most common merchant account types and talked about fees, let’s get to the good stuff. Here are three things you need to decide before moving forward:
Which product types do you expect your customers to sell? Which countries do you want to have access to? What types of transactions do you want to accept?
Remember: Your merchant account is not a one-size-fits-all solution. It’s important that you figure out exactly what you need and how much it will cost before signing up for anything. There are a variety options for ecommerce merchants, so make sure the one that works best for your business is right for you.