Choosing the Right Credit Card Payment Processing Provider

When your business is planning to start accepting credit cards there are a lot of things to think about when choosing a processing provider. Here are the basics.

Many small business owners are hesitant to accept credit cards because they are afraid all of the fees and equipment costs, but fees are not the only thing to consider when you are looking for a payment processor.

First, think about the kind of company you want to do business with. There are banks that provide services that allow you to accept credit cards, as well as independent sales organizations and, sometimes, the credit card company itself.

The advantage of working with the same bank that has your other business accounts is that it is easier for you to deal with, and there may be someone local who you can call when you have problems.

On the other hand, independent sales organizations have more experience and are sometimes more flexible in the kinds of businesses they will work with.

When you're shopping around and learning about the different packages that payment processing companies provide, here are some things you should pay attention to:

*Reliability: Does the network have a lot of downtime? What happens when the network goes down? What kind of customer support structure do they have in place? Is there someone you can call 24/7?
*Products: What different kinds of payment processing products are available? Can they help you choose what's right for you?
*Extras: Does this system also process electronic gift cards, electronic checks or other methods of payment?

The biggest factor that most people use to choose the merchant account company they want to go with, however, is the price. There are many different fees associated with accepting credit cards, including an application fee, the discount rate (a percentage of each sale), transaction fees and fees for sales made over the Internet or the phone.

There are also fees for statements, for not meeting a minimum amount of sales and for any returns or refunds you process.

Look carefully at all the different kinds of fees each company collects and what the rate is. If you're expecting people to make a lot of small purchases with credit cards at your business, you might look for the company with the lowest transaction fee. If on the other hand your credit card payments will be high, you might be more interested in a lower discount rate. It all depends on what your priorities are.

A final thing you'll want to consider when choosing a payment processing system is what if any costs you will incur from renting or buying equipment. Some companies offer free equipment for credit card processing, which can be a big positive that cuts down on your up-front costs.

How to Set up Your Business to Accept Credit Cards?

Accepting credit cards is a big convenience for your clients and customers but it can seem like a big pain for you. Here are some things to think about as you start accepting credit cards.

So you've decided to start accepting credit cards. Congratulations! Accepting credit cards is a great way to increase your sales and to get payments much more quickly than you would have if you were sending invoices to clients.

But your work doesn't end with the decision to accept credit cards--here's what you need to know about how credit card payment processing works.

There are basically three ways to set your company up to accept credit cards: through a bank, through an independent sales organization, sometimes called a credit card broker, or, in the case of Discover and American Express, with the credit card company directly.

If you're a very small business you might first talk to the bank that has your business account and see if they can make you a deal. Banks are sometimes picky about who they will give merchant accounts to, however, and you'll probably get a better deal from an independent sales organization.

Costs for setup and regular fees for payment processing vary widely depending on the service provider and the amount and value of sales you are making. The rate you pay per transaction is known as the discount rate, and it can usually range from 1.5 percent to 3 percent, depending on how the charge was made. There's also a per-use fee that's usually not more than 20 cents that's tacked on to each transaction.

All of this sound like it is costing you a lot of money to accept credit cards. Shopping around for the best rate and lowest fees you can find is certainly in your best interest.

You'll also want to check on any additional fees you might incur such as an application fee, annual usage fee, statement fees, Internet processing fees...the list of potential fees you might get socked with goes on and on.

It is vital that you do your homework and make sure you understand all the fees you will be assessed and what they are for before you sign up with a company.

And since you're giving them your hard-earned money, see if you get anything from them. Some companies have free equipment programs so that you can get your credit card processing machines at no cost, which is certainly an advantage.

There are a lot of things to think about when you begin to accept credit cards. Learn all you can about the companies you are considering working with so you can make an informed decision.

Should Your Business Accept Debit Cards?

So many people these days use debit cards instead of cash, checks or even credit cards to make basic purchases. Should your business accept them?

Many businesses wonder when they are thinking about getting set up to accept credit cards whether they should accept debit cards as well. People love to use these cards that look like credit cards but take the money directly from a person's checking or savings account instead of charging them for the purchase.

Debit cards are convenient for consumers because they don't have to carry around cash or a checkbook but at the same time they're not overspending by using a credit card for daily purchases.

Accepting debit cards is also a great choice for a business for many reasons:

*Another payment option is always a good idea.
*Using any kind of "plastic" causes people to spend more and buy more impulse items.
*The payment is based on the amount of money in the customer's account, so the payment simply won't go through if they don't have enough money--no bad checks!
*It is very difficult for fraud to be committed with debit card payments, since the person using the card has to know the PIN number.
*It's actually cheaper to accept debit cards than it is to accept credit cards because there is no transaction fee paid to your payment processor.

If you think you're already equipped to accept debit cards but you don't have a keypad for people to enter their PINs on, you're missing out. People can still use their debit cards like credit cards on your credit card machine, but the trouble is your credit card processor will consider that just like a regular credit card purchase.

That means you have to pay the transaction fee and the discount rate that you pay on any other transaction, which you wouldn't have to pay if your customer were using a regular credit card.

If you get a device that allows people to enter their PIN numbers when they pay, you'll cut out the fees and be assured of a secure transaction.

The company that provides your credit card payment processing should be able to get you the proper equipment to accept debit cards as well. Once you start providing this service for your customers, you'll wonder why you spent so long paying credit card fees for these transactions.

If you are just now looking into accepting credit cards, talk to the company that's setting up your merchant account about accepting debit cards as well. It is no more hassle for you to provide both options, your customers will love it, and you'll save a little money in the process. It's really a no-brainer to get set up to accept debit cards.

Why Your Business Should Accept Credit Cards?

Some small business owners (and even some larger businesses) are reluctant to accept credit cards because of the fees involved, but your customers will expect to have this convenience when they work with you.

Most people these days expect to be able to pay with a credit card, whether they are at the local gas station or working with an independent service industry person who runs a business out of his or her home.

If you are a business owner who has been reluctant to accept credit cards in the past, you need to understand how important it is to accept credit cards and how it will help your business.

First off, people tend to think that businesses that don't accept credit cards are unprofessional. It's a silent message to your customers or clients that you don't take your business seriously enough to pay the application fee and other fees associated with payment processing through credit cards.

Further, customers might be annoyed by the fact that you don't accept credit cards. Most people don't carry cash anymore, and they might not always have a checkbook with them, but you can bet they always have a credit card, ATM card or check card in their wallet. Make it easier for your customers by accepting the payment method they always have on hand.

If you receive payments through invoicing clients, accepting credit cards is much more convenient and will save you time. Instead of having to type up an invoice, print it out, mail it, wait for a check to arrive, drive to the bank and cash the check, all you have to do is run a credit card payment. If you add up the time and expense in terms of supplies and postage of billing in this way, you'll see that your merchant account fees are lower than the amount you spend to send invoices.

Another advantage for you when it comes to accepting credit cards is that it can help get some of your past due accounts cleared up. When people know they can use a credit card and still pay over time, they will choose that option and you'll get your money faster.

This gives your business a better profile because it means you have less bad debt on your accounts and a higher cash flow.

Even if a lot of the sales at your business are small, you'd be surprised how many people will charge $5 for a cup of coffee and a bagel or a sandwich and drink. Giving people the option to pay with a credit card is always a good idea, and it may actually increase your sales as people who never carry cash and hate to write checks will visit your business more often.

It pays to take the time to consider accepting credit cards. Weigh the costs of a merchant account against the amount your sales or cash flow might increase and you'll likely find the fees don't make credit card processing too expensive after all.