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How to Survive a Difficult Financial Period

Posted: 29 Oct 2019 08:00 AM PDT

Recessions can strike at any time, and there's no real way to avoid it. Especially as a small business owner, you have to come to terms with the fact that you're going to be affected by this one way or another. However, you can definitely prepare yourself better for a situation like this to ensure that you can glide through this time with minimal impact to your operations. Surviving a recession as a small company is all a matter of knowing what your options are, and using them wisely.

Know your situation

The most important thing in this kind of situation is to understand how things work on your end. There are many ways to get a detailed overview of your current operations, and it's important to use modern technology to its full potential in this regard. If you're still relying on old-school analytical methods, you're likely missing out on a lot. This is especially true if you have more complex financial operations spanning across multiple areas. Yes, this can be valid even for a small business nowadays, so be careful and make sure you understand your current situation properly.

Expect further decline

It's not reasonable to expect that the market will start to stabilize immediately. In fact, when you're going through a recession, it's very important to pay attention to how the market is shifting, and assume that it will move in a worse direction at every step. This is quite normal in situations like these, and there's unfortunately not much you can do to protect yourself against the impact of the recession on your business in the long run. However, by simply assuming that things are going to be bad in the future, you will be able to stay on the safe side.

Dip into emergency savings

Having a nice pile of savings is always a good idea in any case, but that's especially true when running a small business. It's important to keep your savings in check at all times and know where you stand in this regard. Don't be afraid to use them, but make sure you can recover what you've taken out as quickly as possible. The whole point of savings is to have them always available, and dipping into them too much is a major mistake that some beginners tend to make. You should have a plan for restoring the money immediately, and that should be your top priority – don't postpone this in any way, because that can cost you a lot in the long run. You never know if you might need those savings for something even more important tomorrow.

Consider taking out a loan

A loan is another good option if you want to get through the situation quickly. Of course, it should go without saying that a loan also has to be used responsibly, because it can put you in an even tougher spot if you're not careful. Some loans are specifically designed for the needs of small businesses, but you don't necessarily have to use those in your situation. A personal loan can sometimes be easier to obtain, and it can still help you bridge the gap. The important things are that you have a solid plan for repaying the loan and that you actually stick to it. If you notice that you're falling behind, make sure to talk to your lender and explain the situation. These things happen, but it's important to alert the lender as early as possible so that they can take any steps they deem necessary to prevent the situation from deteriorating further.

Cut corners in the right places

It's a good idea to start thinking about how you can save some money by optimizing your expenses. There are many things you could do in this regard, and some of them are not immediately obvious. You should consider scaling things down a bit and moving your office into your own home, at least temporarily. This can allow you to save on a lot of things and can make the whole process smoother and more streamlined for you during the recession period. This is also something that will help you save on things like business utilities and other related costs. Generally speaking, you have no shortage of options in this area.

Look at outsourcing

On the note of downscaling, you should also look into outsourcing some of your work. This is something that should be approached with a lot of caution, as it has a strong potential to mess things up for you if you're not careful. But at the same time, outsourcing can be one of the best ways to improve your current financial situation. Fill the gaps by hiring remote freelance employees can bring a lot of extra money to the table if you play your cards right. You'll be able to pay your workers far less than you're paying now, especially when you consider things like healthcare and other types of insurance. Of course, this is not something with infinite potential – there are some things that you'll want to observe here to ensure you don't go too far.

There is definitely a possibility to overdo your outsourcing and find yourself in a difficult situation with regards to getting the job done. But as long as you do this carefully and in coordination with an experienced outsourcing company, you should be able to see good results that will bring down your bottom line significantly. Just make sure that you can recover your workforce afterward because that can be a challenge when coming out of a recession.

Look at long-term solutions

Now is a good time to think about long-term solutions to this problem. This is something that will likely happen again at some point in the future, and it's important to be prepared for that moment. Study the market, know how your company reacts to different developments, and make sure to keep an eye on the possibility to integrate new solutions into your business that can reduce some of these problems significantly. In some cases, you may be able to spend a little more money to ensure that you'll be in a much better situation financially later on, and it's a good idea to look into that as early as possible.

Analyze your progress

You also want to make sure you have an objective overview of where you stand. When you're going through a recession, it can be very easy to get the wrong idea and believe you're doing worse than you actually are. This often happens because you keep seeing other companies on the market performing poorly, and it's easy to get the same impression about your own. But as long as you keep track of your operations through some objective analytical tools, this doesn't have to be the case. You can develop a good sense of how well you're doing and what else needs to be done, and you'll have a precise list of actions that you can take to improve your situation in the future.

Prepare for recovery

When the market does recover, you want to make sure that you're ready to hit the ground running. Make no mistake, things are going to get back to normal sooner or later – and it's important to be in a good position to take advantage of the market's recovery when it does happen. There are many things that play into that, including the grasp of your current finances and the plans you will make for the future. Have a system that you're going to follow during your company's recovery, and make sure all of your employees are on the same page with regards to what needs to be done in the near future. Because in some cases, there will be certain sacrifices required, and it's important to ensure that everyone is aware of that situation.

Control your growth

Last but not least, remember that growth can be a dangerous factor for a company, just as much as a recession can. Sometimes uncontrolled growth is the main factor that kills the progress of a business, and this tends to happen more often than you might think. And when you suddenly find yourself in possession of a significant amount of resources that you've been lacking in the last months or years, it can be even easier to fall into the trap of growing too fast without any good control over the situation.

What this inevitably leads to are lots of problems with your organization's general structure. Of course, growth is exactly what you should be striving for when running your business, but at the same time, too much of it can be just as problematic. It's not rare to see companies go under because they are incapable of getting a good grip on their own situation in this regard.

All things considered, you should not be afraid of a recession. After all, the whole market is going through the exact same issues as you, and other companies have to align to that situation as well. If you play your cards right, you can come out a much stronger business after this is all said and done. But it's going to take a while until you've recovered, and you have to make it a point to keep moving in the right direction through the whole ordeal. Little by little, you're going to rebuild your company's standing on the market.

How to Repurpose Your Stale Blog Posts

Posted: 29 Oct 2019 07:00 AM PDT

  • Content marketing is one of the essential strategies you can implement as a business owner. 
  • Video content typically sees more views and engagement over written work. 
  • Guest posting helps you repurpose your content for other publications, which boosts brand awareness. 
  • Expert roundups, general updates and pillar articles are all great ways to tweak your existing written content. 

Consumers love high-quality content. Marketers and business owners understand this tendency and use this data to reach their target audience. In fact, a recent survey revealed that 81 percent of leaders put their content front and center when developing their marketing strategy. 

If you're in this position, you are probably wondering how you can consistently create new content for your audience. The truth is, you can repurpose your stale blog content and mix it seamlessly with your new content. When you use existing content, you're able to get a more significant return on investment (ROI) on your content marketing, and you can reach a broader audience, which usually translates to more sales and conversions. 

If you are looking to add a spark to your existing blog posts, here are five ways you can repurpose your stale content. 

Create complimentary video content

Have you ever had an article that was getting a ton of views, then all of a sudden its traffic came to a quick halt? If you have experienced this, there's a good chance you could benefit from adding a video that compliments your original piece or explains the concepts you discussed in greater detail. 

According to WordStream, 85 percent of people in the United States watch videos online. Engaging video content is likely to pull in consumers that otherwise wouldn't bother to read your website. You can use this opportunity to pull in new consumers and build your audience. 

You can upload the videos you create to platforms like YouTube and Facebook, with a link to the original written blog post. Consider that 71 percent of people watch more videos than they did a year ago. This is a clear sign that video content is on the rise, and as marketers, we can implement this medium within our blog posts. Aside from the benefit of a broader audience, research also shows that articles that feature videos are three times more likely to generate links, which translates to increased traffic and sales. 

Update old articles

There's a good chance that the thoughts and ideas within your article will change over time. The changes can stem from several sources, including new research, experience, or the preference of the business owner. 

It's your job to make sure readers always have up-to-date information when they come to your website. You can repurpose your old content after enough has changed to deem it worthy of a rewrite. In more severe cases, you'll want to make the change as soon as possible. 

Once you've rewritten the article, you can add an update tag, share it across social media and send the updated post to your subscribers. This tactic will help expose your content to new consumers, as well as show long-time readers that you're committed to providing accurate and valuable information. 

Write guest posts for other publications

Guest posting on other websites is a great way to spread brand awareness. In addition, it's an excellent way to repurpose your old blog posts. If you have a post that's getting less than average traffic, you could try to offer a similar pitch to a big-name publication and write a revised and edited version of your original piece with a link back in the guest post. 

The result is more people will see your new guest post, and are more likely to click-through and read the original post. Certain publications allow you to directly share your content on their platforms if you are the original creator.

Additionally, you can write long-form content for other publications and include multiple links to various pieces of content that relate to your new article. You may not receive the same social signals from Google, but you will generate additional organic traffic on your website. Guest posting is a great way to take a piece of content you've already written, and expand on it and explain the topic through a different lens. 

Add an expert roundup 

Expert roundups are another excellent way to expand your existing content. Industry professionals are often admired and discussed when marketing changes are made to a small to medium-sized business. Essentially, expert roundups are single questions with one answer from several reputable professionals. 

For example, if you wanted to generate traffic to an article on your marketing website about social media, you could ask various experts for their opinion on social media marketing tactics. Next, you'll want to create a new post where you rehash material from your first post and include all of the answers you gathered from the experts. 

You can use this tactic to generate more traffic and build trust with your target audience. The more reputable your experts, the more trustworthy your business appears to consumers. As you post more expert roundups for your site, you're likely to draw in attention from fans of the expert, your previous audience, and new, curious consumers. 

Focus on pillar articles 

Pillar articles are essential to the success of virtually every industry and niche. These central posts are also known as evergreen content. 

Most blog posts have short life spans. Your articles will need continuous updates as new information comes to light. Pillar articles, on the other hand, is a type of content designed to work months, and even years, after it was initially published. Content in this category is usually long-form because it encompasses one aspect of your niche as a whole. 

Let's revisit the fictional marketing website we mentioned previously. If you wanted to create pillar content for this website, you would create categories for social media, content and email marketing. Each article should give consumers a broad breakdown of the topic, with plenty of links to your content. You may want to take some quotes from the expert roundup and include them in your post with your thoughts on the professional's opinion. 

Evergreen content allows you to repurpose your content while adding a fresh spin that is bound to bring in more readers. You'll also get the added

There's no question that content marketing is here to stay. This tactic has evolved drastically over the past decade as our technology has become increasingly sophisticated. If we want to stay on the cutting edge of our industry, we have to work hard to deliver high-quality, informative content to our audience. 

Creating evergreen content, guest posting on other publications, creating videos and regular content updates are all great ways to repurpose your stale content while growing your audience, and increasing your sales. As technology continues to expand, you should pay attention to industry trends such as voice search if you want to target new consumers. However, there's still a lot of life left in your old blog posts; you just have to work your marketing magic and bring them back to life. 

 

How to Market Your Business on a Small Budget

Posted: 29 Oct 2019 06:00 AM PDT

If no one knows about you, they can't buy anything from you. That's what makes marketing such a crucial part of your business endeavor. 

Many small businesses don't have the financial resources to dedicate to expensive ad campaigns like some of the big players. Luckily, the internet has provided plenty of ways to market your business on a budget. Here are several marketing strategies small businesses can use that won't put a big dent on the bottom line.  

Social media

There are very few things that everyone uses. Social media is one of them. In fact, 3.48 billion people are using social media in 2019. In short, there is an excellent chance that your target customers are on social media. That means you need to be on it too. 

The platforms you use will vary slightly depending on your target audience. However, the sheer number of users makes both Facebook and Instagram excellent choices for any business. 

Facebook enjoys the largest market share of any social media platform with 2.38 billion users as of July 2019. Instagram has less, a not-so-paltry 1 billion, but it's a bit easier to share content organically. Plus, people love visual content, so an Instagram strategy is well worth your effort.

LinkedIn focuses on business social networking and is an excellent resource, particularly if you have a B2B company. 

Facebook boosted posts

Previously, free advertising was quite effective on Facebook. That's not the case anymore. But, paying to boost your posts can provide quite a healthy ROI when done well. In fact, 76% of people over 35 have bought something because they saw the ad on Facebook.

The first step to effectively boosting your posts is to choose your content well. Remember, the content you're posting should primarily focus on helping your audience. For example, if you're a real estate agent looking for clients, offer information about how to prepare a home for sale, key things to look for when buying a home, etc. Offer your services as an agent from time to time but establish yourself as a helpful, knowledgeable entity first.

Images are excellent for attracting attention and making your ad memorable. In fact, posts with images have 650% more engagement than text-only posts. Just be careful, Facebook will limit the reach, and even deny images, that have more than 20% text. Use your caption space and only put the most important information in the image itself.

Instagram

Instagram is primarily a visual platform. We already know that people love photos, so why not take advantage of it? If you're running a coffee shop, snap some quick photos of your latte art to post later. If you own a salon, then take some pictures of your hair and nail art (with customer permission, of course). Better yet, enlist your baristas and stylists to help and take some of the work off your shoulders. You can use a management tool to approve posts before they go live to oversee the quality.

Choose relevant hashtags to promote your content to your target audience, even if they don't already follow you. 

LinkedIn

LinkedIn is an excellent platform for networking with other businesses, as well as establishing yourself as an expert in your industry. If you are focusing on B2B marketing, this is the social media network for you. An astonishing 80% of B2B leads come from LinkedIn.

Subscriber email list

Direct mail marketing was successful in its day, but now no one bothers to read their junk mail before tossing in the recycling. To make matters worse, it can get quite expensive, contributing to a plummeting return on investment (ROI) for this type of marketing. 

According to the Harvard Business Review, direct mail and email marketing yield similar results. But factor in the fact that direct mail costs about 100 times more and the ROI for email marketing beats direct mail by a whopping 95 times.

Digital links allow you to provide the customer with so many resources. You put information in the email designed to draw the customer to your site or to further resources. You can also track who is opening your emails and some of the steps they may take afterward. Make sure the information you are sending is high-quality and genuinely helpful to your readers. Be thoughtful about how often you send out emails as well. People hate being spammed and even quality information sent too often can be off-putting for many people.  

One of the biggest roadblocks to this type of marketing is that business owners often feel that their list is too small to warrant the time put into crafting emails. Build your subscriber list through social media campaigns or invite customers to sign up for your newsletter during the checkout process when they are buying something. You'll be amazed by how effective it can be to grow your list by simply asking people for their email. Of course, make sure your newsletter is worth reading or your emails will start going directly to the junk mail folder.

Invest in SEO

Google handles 40,000 search queries per second. If you ever wondered why you should care about begin found on Google, there's your answer. People are looking for information on Google, you want to be the one providing it in your niche.

SEO is a huge topic, but the basics boil down to providing helpful, high-quality content to your audience. You'll want to optimize that content by filling it with relevant keywords and eye-catching visuals. Create headers that clearly convey what the reader can learn from reading your article. Answering a query thoroughly and concisely can also get you that coveted "featured snippet" spot at the top of Google.

Take advantage of optimizing for local SEO, as there will be less competition in your local market. Include place names in your posts and create a business account with Google so the search engine can direct local queries to you.

Customer referral program

If your customers love you, why not give them the opportunity to support you? Some may do this organically by telling their friends about your product that they are in love with. But most could use an extra push. A customer referral program is a perfect way to nudge them.

Think about what would be valuable for your customers and offer it to them. A tried-and-true method is to simply offer them a discount off their next purchase if they supply a referral. However, the downfall of this method is that the customer will be more focused on their discount rather than supplying a quality lead. The chances of that lead fizzling out are higher.

Consider using a tracked method instead. Give your customers a referral code they can hand out to their friends. Then, when their friends use the code, both the friend and the customer get something. It can be a credit on their next purchase or even cash in hand. 

Get creative and think about what you can offer that will motivate your customer base into becoming your brand ambassadors. 

Marketing is essential for the success of your business. Thankfully, a huge marketing budget isn't. Social media, email campaigns, SEO and referral programs are all excellent ways that you can spread the news about your business without breaking the bank.  Apply these principles today and watch your business flourish.

Is a Subscription Website Right for Your Business?

Posted: 29 Oct 2019 05:00 AM PDT

If you are thinking about starting a subscription website, there are a few things you should know first. 

Subscription sites, which you require visitors to pay a monthly fee to become a member, are an effective way for your business to deliver high-quality content to customers. A subscription site can also help you get recurring income.

It's very likely that you've been part of a membership site at some point. Subscription sites cover a whole range of subjects; everything from baking to professional networking. People join these websites to learn and to connect with their peers. It's very likely that your business can benefit from launching its own membership site. 

It's important to remember that when you create a website that's only accessible to members, you're making your content invisible to the internet. You're creating many gated pages that will not show up on search results. This is good if you know what you're doing. When you have valuable content that is useful to a limited number of people, then a subscription site is a good idea. 

The question is, how do you know if your business needs a membership website? 

What are the main components of a subscription website?

Any business that starts a membership site, does so with two things in mind: content and community. 

Content

If you have in-depth knowledge about a subject matter that will help people, then you have a good reason to start a subscription site.

Content can include things like:

  • Articles

  • Video courses

  • Podcasts

  • Webinars

  • Tutorials

  • Counseling and coaching

  • Any combination of the above

A membership site helps you deliver content to specific people who have paid for it or signed up on your site. It gives you a way to share valuable content online without making it accessible to the entire internet.

Community

If your business has a strong community component then a subscription site makes sense. By creating a membership site, you give people a place to discuss your product or solution. They can ask each other questions and learn from interacting with others. 

A subscription site creates a unique place for people to discuss common interests and experiences that don't need to be visible to the rest of the world. It can also form a support and motivation group where people help each other. Some examples of membership sites for communities are:

  • Health and fitness communities

  • Professional and industrial networking groups

  • Online coaching and counseling

  • Business and expert directories

It's also quite common to start a subscription website that needs to provide both content and a community platform. Building a community for your brand gives users a helpful resource when they run into problems. 

Content and community form the core of any membership website. However, there are additional benefits that subscription sites offer which can help you figure out if it's right for your business. 

What are the benefits of having a subscription site?

A membership website will help you set up and manage a community. It also allows you to leverage your content to help people who value it. Here are some of the benefits of having a subscription site so you can understand if it's right for you. 

Content protection

Your content is an asset that can generate profit over several years when carefully protected and managed. A membership site lets you create a secure platform that allows you to deliver content easily and automatically. It makes it easier to prevent outsiders from stealing and misusing your content.

With a subscription site, you can get passive income from your content and give value to customers. Your customers will value your content more when they find that it's exclusively available on your membership site.

Community platform

When you create a membership site, you create a space where people can discuss a common interest. Your customers can get in-depth answers about your industry, business or product.

It creates a place for discussions and where people can increase their knowledge about a subject. People can learn from each other by asking questions and sharing ideas. They can also support and motivate each other. 

Subscription site platforms allow you to create and manage online communities. You can control who has access to community discussions and Q&As. This is useful, especially if your users share pictures, stories and personal information. 

Creating a membership site is necessary if your business will have a community of people who will be active and engage with each other. Of course, your business may need a subscription site that has both valuable content and a strong community base. 

Drip content management

A membership website allows you to spread content access across different events and time periods. This is useful when you have a lot of content, or if users need to work with it in a particular order. 

Sometimes, you may offer a discount or a free trial of your website to visitors. Without drip content features, there's nothing to prevent users from downloading all of your content at once. They can then cancel their membership and you've lost a subscriber. 

You can use a subscription site to create and manage drip content. Half of small and medium-sized businesses send drip emails using marketing automation software.

You can also add email marketing integrations to membership plug-ins to accomplish this. This will ensure that you keep subscribers for a longer period of time. Using drip content on your membership site prevents users from getting overwhelmed with too much information at once. It keeps them engaged and active on your site by making content available piece by piece. 

Automation

When you automate different business tasks, you create more time for yourself. You can use it to work on more content and to grow your business.

Use WordPress plugins to automate many time-consuming activities. It's not practical to manually repeat the same tasks for each new customer. If you have a membership site with hundreds, or thousands, of users, then managing them without automation is impossible. 

You can save time by automating different activities:

  • Allow users to become members and access content with a user registration form.

  • Send emails such as welcome messages, notifications and invoices automatically.

  • Automatically deliver content, like downloadable files, instructions or links to content.

  • Allow users to set their password, edit their profiles and recover their account if they forget their password.

  • Create automatic payments with a membership site so users are charged for access to your site.

  • Manage user profiles to change their membership status, cancel their subscription or carry out other admin work.

Automation creates time that allows you to look after unusual problems. You'll have the freedom and the time to make great and fresh content. You can focus on giving your users excellent value to create a better experience for them. 

Does a membership site make sense for your business?

By now, you should have a good idea about whether your business can use a subscription site. If you have brilliant content to share with customers, then creating a membership site will serve you well. It's a great way to build a close and information-rich community of like-minded people. 

A membership website can help you leverage your business, especially when you have a niche product, or if you're working in a niche marketplace. It makes sense to start a website where the content is not available to everyone. 

Your main consideration, when creating a subscription website, is content and community. When these two things form significant features of your business, a membership website will help launch you to success. 

Payment Gateway vs. Payment Processor

Posted: 29 Oct 2019 05:00 AM PDT

If you're in the market for credit card processing solutions, you might have come across the terms "payment gateway" and "payment processor." While these are two key, related elements of credit card processing, they are not the same. If you're unsure of the distinction, you're not alone. However, to make an educated purchasing decision about your small business's ability to accept credit card payments, it's important to understand the nuances.

This guide will introduce you to payment gateways and payment processors, also explaining how the two work together. If you plan on accepting credit card payments online, you'll likely need both a payment gateway and a payment processor, so understanding each is critical to making the right choice for your small business.

What is a payment gateway?

A payment gateway facilitates online credit card payments. It is a technology that creates a secure connection between your business's website or browser and the credit card processing company. This secure connection is used to encrypt credit card payment data for every transaction, verifying the authenticity of a transaction and keeping sensitive information secure. In the modern world of digital business, the security of your customers' financial information is of the utmost importance.

Generally, you can set up a payment gateway in partnership with your chosen credit card processing company. When you set up a payment gateway through your merchant account provider, complications like compatibility issues are less likely. This is often the most cost-effective route for setting up a payment gateway.

Some credit card processors have their own payment gateways, while others work with third-party payment gateways on behalf of their client businesses. One of the most popular third-party payment gateway providers is Authorize.Net, for example. Usually, when you work through your merchant account provider, you can avoid payment gateway setup fees. You should always check the terms and conditions before setting up a payment gateway so you know exactly how much it will cost you upfront, as well as on a monthly and sometimes even per-transaction basis.

How does a payment gateway work?

A payment gateway works during online transactions by encrypting credit card information as it enters the payment gateway at the time of purchase. The encrypted data is securely sent to the credit card processor, the card network, the bank that issued the card and your business's bank. Once the encrypted data is delivered, the customer's card is charged the appropriate amount for the transaction. The funds are delivered directly to your business's bank account, minus the fees and processing costs you agreed upon with your credit card processor.

 

Editor's note: Looking for the right credit card processor for your business? Fill out the below questionnaire below to have our vendor partners contact you about your needs.

 

 

What is a payment processor?

A payment processor is the company that handles the credit card and debit card transactions for a business. If the payment gateway moves encrypted data around, then the payment processor could be said to move the funds from one account to another.

Payment processors can be categorized into front-end and back-end processors. Front-end processors maintain connections to card networks and settlement services, and manage merchant accounts on behalf of their clients. Back-end processors primarily settle the transactions, moving money from the issuing bank (the customer's account) to the merchant bank, which ultimately transmits funds to the business's bank account when the transaction is finalized.

Payment processors' pricing structures and fees vary by the amount and value of the transactions you process and the model you choose. Generally, payment processors charge a percentage of each transaction, often adding a small per-transaction fee as well, and a few other fees, such as a monthly statement fee, a monthly minimum fee and an annual PCI compliance fee.

If you want to accept credit card and debit card payments from your customer online, over the phone or at the point of sale, it is necessary to partner with a payment processor.

Do I need both a payment gateway and a payment processor?

You might need both a payment processor and a payment gateway in order to accept credit card and debit card payments online. However, you can typically forgo the use of a payment gateway if you only intend to accept credit card and debit card payments at a point-of-sale terminal. Virtual terminals accessed through your computer, though, require the use of a payment gateway even if you only accept payment at the point of sale.

Is PayPal a payment gateway or a payment processor?

PayPal is what is known as a payment aggregator, and it has its own payment gateway, called Payflow. Payment aggregators do not require your business to set up a merchant account, unlike traditional payment processors. Instead, aggregators group your transactions with those of other merchants, essentially making you a submerchant on the aggregator's own merchant account.

Payment aggregators generally have a quick and easy application process and allow for much faster processing times than conventional payment processors. Fees tend to be more straightforward, and aggregators are often cheaper overall, depending on the amount and value of your transactions.

Unfortunately, payment aggregators are warier of risks and may place holds on your account if they detect potentially suspicious activity or the increased possibility of chargebacks.

Unlike payment processors, aggregators generally offer fixed rates, so even as your transaction volume increases, the price you pay does not increase. Payment processors, on the other hand, typically offer more favorable rates to businesses with high transaction volumes or high-value transactions.

What is the difference between a merchant account and a payment gateway?

A merchant account is essentially an arrangement with the bank to create a space for pending transactions where the funds go before they are credited to your business's bank account. It is distinct from a payment gateway in that it doesn't transmit encrypted data, but rather the funds related to the transaction. The payment will temporarily be held in the merchant account as the transaction is finalized, at which point the funds will pass through the merchant account and into your business's bank account.

To set up a merchant account, a payment processing company will assign you a merchant ID number. This ID number is tied to the merchant account, which holds your funds until the settlement of a transaction. A merchant account is necessary to accept credit card and debit card payments from your customers, unless you are operating as a submerchant with a payment facilitator, like PayPal, Square or Stripe. So, while a merchant account is distinct from a payment gateway, it is often essential to accept both online and point-of-sale credit card and debit card payments.

How should I choose a payment processor and payment gateway provider?

Selecting the right payment processor and setting up a payment gateway can seem complicated at first. There are many payment processors out there, all with their own pricing models and fee schedules. Navigating the sea of available services can be tough, especially for an entrepreneur concerned with the day-to-day operations of their business.

To help you choose the right payment processor for your small business, business.com has established a guide to accepting credit card payments. We have also closely reviewed some of the leading payment processors on the market today to come up with a list of our best picks. To find out more about payment processors and how to choose the right one for your business to start accepting credit card and debit card payments, both online and on location, check out these links:

The right credit card processor can make a big difference for your small business's revenue and your customers' satisfaction. However, it's important to thoroughly investigate the market to ensure you receive the best deal for your business. Whether that means accepting payments at the point of sale only or setting up a payment gateway for online transactions depends largely on the type of business you run and the volume and value of your typical transactions. Understanding the difference between payment processors, payment gateways and merchant accounts is the first step to making your buying journey less complicated.
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