Credit cards have been in use by consumers and businesses for decades. Making purchases via credit card allows the purchaser to have more freedom about the types of goods or services that can be bought at the moment, regardless of their cash flow situation at the time.
Sole proprietors, small businesses and corporations alike benefit from offering credit card processing as a payment option. This is because there will always be a certain percentage of customers who refuse to pay by cash or check for anything; they simply want to use the card. That means that if a business does not offer the card (credit or debit) option, they are missing out on revenue opportunities.
If you are saying, I want to accept credit cards as a payment processing option, here are 5 FAQs for you to consider:
1. What decisions do I need to make in order to get set up with the ability to process credit cards?
A: The two most important decisions you face in terms of getting yourself set up to accept cards are: a. with which merchant account service provider will you contract?, and b. with which payment gateway will you contract?
2. What is a merchant account service provider and why do I need one?
A: The merchant account provider is the one with whom you will work on a day to day business, processing transactions and calling their customer service number if you have questions or issues.
3. What is a payment gateway?
A: The payment gateway, on the other hand, is the company that will handle the actual money interchange logistics between banks when a charge is made.
4. What types of terminals do I have to choose from?
A: The type of terminal you should choose depends upon your type of business. If you have a building where customers come to buy goods and services, you will need a standard terminal. On the other hand, if your business is mobile (e.g., outdoor farmer s market, Christmas tree lot, taxi service, mobile mechanic, etc.) then a wireless terminal with a built in printer is the way to go. Meanwhile, if you will never actually handle physical credit or debit cards directly, a virtual terminal that is operated via your computer is the best choice.
5. What fees should I expect to pay?
A: The money you pay to the merchant account service provider breaks down into two main categories: the discount rate and the additional fees. The discount rate is a percentage (usually 2 to 3.5 ) of each purchase (transaction) amount that a customer pays via their card. Meanwhile, the other fees are usually fixed amounts that are charged either per transaction, upon sign up, upon contract early termination, or on a monthly basis.
The fees are one of the most important factors to consider when looking at various providers. After all, just paying 1 2 more per transaction could add up to hundreds or even thousands per month in fees that go to the merchant account service provider, rather than to you.
When you are ready to accept credit cards as a payment processing option, consider these 5 FAQs.
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