Credit Card Processing for Small Businesses

Whether you conduct your business’ sales in person, online, or over the phone, you will want to feel secure about how your customer’s credit cards are being processed. Being able to accept credit cards as a form of payment is a huge benefit, and credit cards are probably the number one source of revenue, especially in online businesses. In addition to making payment easy, using a credit card also offers customers with a record of their sales so they can easily track their finances.

When choosing a credit card merchant account service, you will have several options. The first option you may want to consider is using a bank for the credit card processing services you need. Most banks will offer merchant account services with their business account packages. Keep in mind, however, that many banks do not do this type of processing themselves and will actually outsource the service. It may be a good idea to shop around and get a feel for the different rates banks have to offer before choosing the bank you will want to work with.

You may also want to consider an established credit card company. When choosing this option, remember that each company will handle merchant credit card accounts differently. Registered credit card brokers may also be an option, however, many of these organizations are not regulated, so this could be a risky investment, and are usually more expensive than smaller merchant account providers.

Some types of businesses may be more high risk than others. This depends on credit history and the potential for fraud among clientele. For example, online adult sites are considered more of a risk than a boutique. Credit card processing companies will also take how long you have been in business, as well as your chargeback rate, into consideration when determining how much of a credit risk your company may be.

Qualifying for a merchant account can be a difficult process. Credit card processing providers will investigate your business to make sure it is legitimate, which usually involves a background check. In addition to a thorough credit check, you may be required to provide credit references, which will usually be your product suppliers.

The costs of credit card processing are also something you will want to consider. In addition to paying for service costs, you will also need to purchase all of the required credit card processing equipment. The credit card terminal (what is used to swipe the card) will be your biggest up-front investment, for which you can expect to pay $150 to $700. If you wish you have a wireless terminal, it will cost anywhere from $500 to $1000, or even more, in some cases. Many businesses will choose to lease a machine, which can run about $20 a month. In some instances, you may get a terminal as part of a package when you sign up for a merchant account. This may end up saving you a considerable amount of money. You will also need to factor in the discount fee, which is the percentage of money your provider charges for every transaction, as well as application and activation fees.