If the time has come that you are ready to open your business to credit card transactions, there are several things you must consider before moving forward. Accepting credit cards at your place of business requires more than simply hanging or posting a “We accept the following cards”, sign. Before you can accept credit cards you have to do some research on credit card processing and merchant accounts to ensure your next move is cost effective.
Credit card processing
In order to accept credit cards you must be able to process those transactions to secure payment for your products or services. Credit card processing is the action that takes place when money is transferred from the bank of the customer to your business merchant account. In the past credit card processing was more of a detailed and sometimes cumbersome paper system, however today money can be transferred or automatically “held” electronically. This happens immediately after you swipe the credit card or begin the processing of a transaction, ensuring your business will receive payment from the customer’s bank. In order for your business to receive this money, you must have an established merchant account.
Opening a merchant accounting
Now that you understand the basic concept of credit card processing as well as the role of your merchant account, the time has come to take the next steps toward accepting credit cards. The following tips can help you through the process.
- Before moving forward with establishing a merchant account be sure you have the following things, a business checking account, employer identification number (federal tax ID) and active physical or virtual storefront.
- Gather all of your personal information that may be needed during the application process. This may include your driver’s license, business checking account numbers, licenses and permits, business financial statements and any other documentation that may be required to open the merchant account.
- Click here to compare merchant accounts – You may be qualified to open a merchant account with the same financial institution where your business currently banks, however this is not the best option available. In most cases banks have more requirements that have to be met in order to be approved and may not provide the most cost effective options. Compare bank merchant accounts as well as those offered through Merchant Service Poviders (MSP). Inquire as to what fees are associated with any merchant accounts offered, to discern which account best meets the needs of your business for credit card processing at the most affordable price.
- Open your merchant account- Once you have compared and considered all of your options, it is time to open your merchant account. After this process is completed and you are approved for a merchant account you can begin to accept credit card payments for products or services provided by your business.
No one can argue to point that there are some costs associated with accepting credit cards as a method of payment for your business. Fortunately, businesses that accept credit cards usually see a decent rise in sales as a result of this action. If you do your homework and select the right merchant account, the cost of credit card processing is outweighed by the increased revenue coming into your company as a result of credit card sales.
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