How Small Businesses Can Accept Credit Card Payments
When credit cards are accepted, businesses are making it easier and convenient for the clientele to make big purchases and it can really help grow your business. Plus, it can save you time too as the business owner. Whether you’re an online seller or in-store retailer, accepting this type of payment when cash isn’t an option is a good alternative.
As a small business owner, there are also a lot of ways to accept credit card payments. If you’re new to accepting this type of payment option, you will need to be familiar with these:
Setting up a merchant account.
To be able to accept credit cards in a retail store, you will need to set up a merchant account through your financial institution or your bank. This involves an application process and once you get approved, you will get the most common credit cards like Visa and Mastercard. Other credit card companies may have a different application process for you to be authorized to process the cards.
Acquiring the processing equipment.
After you are approved for the merchant account, you will be leased or you can buy a credit card processing equipment from your financial institution. Most machines have a card reader attached to a modem. This way, you can receive instant verification if the card is approved or declined at the point of sale. Keep in mind that you will need to verify the validity of the card by asking for the cardholder’s identification or you can compare signatures on the back of the card and the charge slip. If there is no signature at the back of the card, it is not considered valid.
Online Processing method.
If your business only caters online, it is still possible to obtain a merchant account through an online payment processor. You will just need to set up your account by entering your business information, verify a bank account where the money will be transferred or you can also enter your own credit card information if you wish to transfer more than $500 a month. There are also transaction fees that you will need to be aware of from these traditional merchant providers.
Understand the fees.
A lot of credit card processing accounts will charge a fee per transaction or other merchant accounts will charge monthly, quarterly or annual fees. Some even charge for every transaction made and that includes refunds so it’s best to shop around for the credit card processor that will suit your business needs.
Know the rules.
Retailers are charged fees for accepting credit cards but they should never pass on those fees to the customer. This is against most credit card processing agreements. If you do this practice, then you might just lose your merchant account.
Paying through credit cards is becoming a big part in the lifestyle of Americans. Still, a lot of people find credit card processing complicated and difficult to comprehend. As a business owner, the best way to accept credit cards is that you do understand the basics to avoid providing wrong solutions and pay more when you should not.
James is an internet entrepreneur, blogging junky, hunter and personal finance geek. When he’s not lurking in coffee shops in Portland, Oregon, you’ll find him in the Pacific Northwest’s great outdoors. James has a masters degree in Sociology from the University of Maryland at College Park and a Bachelors degree on Sociology from Earlham College. He loves individual stocks, bonds and precious metals.