When you want to get your small business set up to accept credit card payments, one of the first things to determine is how you want to accept credit card payments. For example, you could swipe the card through a machine, enter the card number manually over the phone, process credit card payments through a mobile device connected to your cell phone, or accept credit card payments online through a gateway. Your choice will depend on how you generally do business.
You should also determine what types of cards you will accept. For example, you may want to accept all major credit cards and also debit cards, gift cards, stored value cards, and smart cards.
You will need a merchant account. You may be able to get a merchant account through your bank. As explained in an article on Entrepreneur, your bank may have minimum requirements as to how long you have been in business and will take into account your credit rating. You may need to show the bank the volume of credit card sales you expect to have and the average transaction amount. You might also need to show the bank your business plan and provide some references.
Other alternatives for getting a merchant account include credit card processing companies. They may have lower rates but start-up costs could be higher. There are also independent sales organizations that can set up merchant accounts. They work on a commission basis for banks.
In selecting the way you want to process credit card transactions and the merchant account provider, you could ask owners of businesses similar to yours how they process credit cards and how satisfied they are with the service. They could give you advice and recommendations.
You could also get quotes from different credit card processing companies on websites such as BuyerZone or Resource Nation. Or you could check out the companies indicated in the Credit Card Processing Review on the TopTenReviews website.
As indicated by Daniel Kehrer on Business.com, if you decide to go with mobile credit card processing, you could consider Authorize.Net, which offers merchant accounts and complete wireless solutions. Encore Payment Systems is another company that offers wireless, portable payment acceptance and processing. Other possibilities include Intuit, for accepting credit cards in Quickbooks and on your mobile phone, and PayPal, for accepting credit cards on a website or by phone.
The typical fees you will be charged for processing credit card payments include the discount rate, which is a percentage of sales, per-transaction fees, monthly minimum charges, statement fees, and fees for processing chargebacks. Depending on how you decide to process credit card payments, there could also be fees for supplies, such as roll paper. And you could have the cost of purchasing or leasing equipment.
The equipment you may need, depending on your processing method, can include a phone line; a point of sale machine with a terminal for swiping cards or keypad for entering credit card numbers manually, or both; a printer; a retail credit machine, which is a small portable terminal that can be connected by telephone line, DSL Internet, or cellular network; or a cell phone and wireless handheld credit card imprinter.
Rates and fees can vary greatly among credit card processing companies. It is important to look at the overall agreement and not just the discount rates and transaction fees. Low introductory rates may later change. You may want to test the customer and technical support. And you should be aware of the term of the agreement. Some agreements may be for at least three years, with heavy fees for early termination. Also, when the agreement expires you may need to give advance notice if you want to cancel, in order to avoid an automatic renewal.
Sources:
Accept Credit Cards in Quickbooks and on your mobile phone, Intuit
Accepting Credit Cards, Entrepreneur
BuyerZone
Credit Card Processing Review, TopTenReviews
Daniel Kehrer, Setting Up a Merchant Account, Business.com
Encore Payment Systems
Getting Started, Visa
How to Set Up Credit Card Processing for Your Business, WikiHow
Mobile Merchants, Authorize.Net
PayPal Merchant Services
Resource Nation