If you want to sell a product or service, you need to be able to accept credit cards. While many online businesses start out by only accepting PayPal or Google Checkout, it doesn’t take long for them to discover they need a more flexible option. In addition to opening your business up to a wider pool of prospects, working with a true credit processor that provides a merchant account will allow you to take complete control of the checkout process. Being able to fully integrate a branded checkout process into your site can significantly boost your conversion rate.
There are a lot of companies and providers in the credit card processing industry. While competition is good in terms of keeping pricing low, it can make searching and narrowing down your selection quite a challenge. Even though it may initially seem overwhelming to tackle, the good news is once you know what’s most important, you’ll be able to focus your search and keep it on track.
Discounting is the credit card processing industry term for when you’re charged. Your processing fees can be assessed on a daily or monthly basis. Not surprisingly, most businesses prefer monthly discounting. While some merchant providers may charge a fee for monthly discounting, there are plenty that offer it for free.
In terms of standard credit card processing fees, a wide range of variables, including the type of business and annual sales volume impact exact rates. The rate for a brick and mortar retailer may be under 2 percent, while a small ecommerce business may pay over 4 percent. The best thing you can do is get actual quotes from multiple providers. Having this information will allow you to determine the average fee range for your business.
You’ll also want to read through providers’ fine print to find out their exact contract terms, as well as their funding cycle. An ideal contract is one that’s month-to-month and doesn’t have an early termination fee. In terms of a provider’s funding cycle, keep in mind that, while they may advertise next-day funding, their settlement time policies may actually make it a two-day cycle. For most businesses, a two-day cycle length is still acceptable.
Always Open to Negotiation
As previously mentioned, there is a lot of competition within the credit card processing industry. If you find a provider that’s a good fit, but you aren’t crazy about one of their specific terms, don’t be afraid to negotiate. You can collect information about what other provider are currently offering and then present this information when you negotiate.
Now that you know the basics of how credit card processing works, you just need to compare multiple processors and choose the one that’a right for your business. Because finding the right set of processors can still be a challenge, we have an excellent, helpful resource. Our list of the Top 5 Credit Card Processors is specifically designed to assist business owners in your exact position.