Credit Card Processing Blog

If you have been considering starting a business from home, or are already the proud owner of a home based business, you should learn about the various options for accepting credit cards as payment from your clients.  It used to be that accepting credit cards from customers was too expensive for the average home based business owner; but now there are a number of inexpensive methods for accepting credit cards thanks to the internet and the popularity of e-commerce.

Whether you operate your business entirely out of your home, or have an internet presence – you’ll notice an increase in sales when you start accepting credit cards.  Many people make impulsive purchases with credit than they wouldn’t make when paying with cash or check; and many people just don’t carry cash on them anymore – preferring to use their credit and debit cards.  Make it easy for your customers to purchase from you by accepting credit cards.

Merchant Account Providers

Many traditional merchant account providers have discovered the need for credit card processing by home business owners. With a merchant account, you can begin accepting credit as payment from your customers.

It can be difficult to qualify for a merchant account.  It involves an underwriting process and a strong credit score; although many merchant accounts have different approval requirements for home based business owners than they do for traditional businesses.
Once approved, when your customers pay using their credit cards the amount of payment minus fees provided to the bank or merchant account provider are deposited into your business account. The higher your sales volume and credit card use, the lower your fees will be.

Third Party Credit Card Processing Options

Third party providers have merchant accounts with banking institutions; and then allow home based business owners to accept credit cards from their customers and process them through the third party.  There are usually higher fees associated with using third party credit card processors; but it may give you an option to accept credit cards if you were unable to obtain approval for a merchant account yourself.

Accepting Credit Cards Through Independent Sales Organizations

If you are considered a high risk home business, or have less than perfect credit that caused you not to get approved for a merchant account – an independent sales organization can help you collect payments from your customers online.  The fees associated with the service are typically much higher than those you’d pay to a merchant account directly, but if you need to accept credit cards this is an option.

Shop Around!

There are many different merchant account providers online today. In order to find the right one for you business, you need to research and compare the various programs. It is important to have an idea of everything out there to make the most informed decision. Check out the options offered from banking facilities, independent organizations, and third-party processes like PayPal.

Start Early

Don’t expect to be ready to process credit cards as soon as you sign up for service. Most merchant account providers will require approval for any business or individual wishing to set up and account. There is an underwriting process that needs to be completed. While merchant accounts generally have high rates of approval, there may be some issues you need to work out first before opening an account. If you need to start accepting credit cards for the good of your business, you need to start the process now.

Understand the Fees

Regardless of the method you select for credit card processing, you have to pay close attention and compare the fees each provider charges for services and individual transaction. There may be a monthly maintenance fee in addition to the individual fees that are processed for each transaction. If you select a service that charges significant fees, you’ll end up losing more money than you are making, especially on smaller transactions.

Understand the Terms

It is always essential that you read the terms and conditions – also known as the fine print – on any business service you sign up for as it is the only way to ensure you are getting what you need. If you have questions or concerns about the terms of any service, contact customer service directly and make sure you get a clarification.

Understand the Process

Make sure you are able to understand how the credit card processing works through the provider you select. You need to be able to address issues with customers who wish to use their credit cards for your business services. In order to be able to help them, you have to be able to understand the process yourself. Providers all handle money and transactions differently. You want to make sure you know how the funds are received from the customers, how soon the money is available to you, and how long the total transaction takes to complete.

Never rely on the merchant account provider to handle everything because you don’t feel like doing the research. Because of the amount of fees involved and the importance of providing reliable service to your customers at all times, you need to do the legwork and select the right credit card processing service to accommodate not only your business needs but the needs of your customers. Whether you are impecunious or not, credit card processing fees can result in huge losses if you sign the wrong deal. Take this decision seriously, evaluate all options and you will most likely succeed!

Photo via mccluskeyadrian

Gift cards are a big business. Any company that has a merchant account or sells gift cards can benefit from this popular trend that is not likely going to end any time soon. Gift cards are undoubtedly in higher demand during the holiday seasons, however there are plenty of other occasions throughout the year when individuals might opt for a gift card versus shopping for the perfect gift. Here we look at how gift cards can benefit your business.

Gift cards versus traditional gift certificates

Gift cards are the new generation of traditional gift certificates that have been available for years. There are many businesses that still offer traditional gift certificates, which, though convenient, are rarely consumers’ first option. While gift certificates still have a place in the gifting sector, gift cards offer many more benefits that their predecessors do not – benefits recognized not only by the seller, but also by those who buy or receive gift cards.

1. Gift cards can be reused.

When a paper gift certificate is issued, it is good for only the amount of the initial purchase. Many gift cards, though, can be reloaded, or have additional credit added to the card for continued use. While the benefits to the merchant are clear, convincing a consumer to tie up their cash in a gift card can be a bit of a challenge. A good marketing campaign can overcome this obstacle and many merchants have learned how to make reloadable gift cards attractive to their customers.

2. They’re easier to track and manage.

Gift cards are processed using the same credit card processing system in place for regular credit and debit cards, making them easy to redeem, track and manage for all parties.

3. Gift cards make good gifts.

Gift buying has always been a point of contention for some consumers. Not all people are born shoppers and the thought of pounding the pavement trying to find the perfect gift can often be overwhelming. Gift cards offer an alternative to shoppers who would otherwise opt for cash in a card.

4. They’re readily available.

Gift cards are usually available at cash registers, which makes it convenient and easy for customers to pick up at the last minute or as in impulse buy.

Gift Card Programs

There are several reasons why a merchant might want to initiate a gift card program for their business. In addition to the above mentioned benefits, it’s important to note that from a business prospective, gift cards can increase your sales beyond the purchase of the card. For example, 3 out of 4 consumers will spend more than the amount available on their gift card when they shop at your store. On the flip side, up to 21 percent of individuals who receive a gift card will fail to redeem the entire balance, which is still beneficial to the business. Refunds can be in the form of a gift card, therefore cash refunds can be eliminated for customers making their purchase with gift cards. Any business with a credit card processing system in place can benefit from gift card programs thanks to the minimal added expenses.

Ready to start accepting credit cards? Unfortunately, setting up a merchant account takes a lot of research and work, but it can pay off big time if you’re committed to providing your customers the best experience possible. Do your homework – find the most cost-effective solution that offers you exactly what you’re looking for.

Luckily, we can help you get started.

Credit Card Processing

Credit card processing is what happens when money is transferred from your customer’s bank to your business merchant account. In the past, credit card processing was a more cumbersome paper system, but now money can be transferred automatically and electronically, making purchases easier than ever. The whole process begins the second a credit card is swiped. With an established merchant account, you’ll soon receive direct payment.

Opening a Merchant Account

Opening a merchant account is the first step! Before moving forward, make sure you have a business checking account, employer identification number (federal tax ID) and active physical or virtual storefront.

Gather all the information required for 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 proves you own a fully operational business.

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, but that may not be the best option. In most cases, you have to meet many more requirements to be approved through your bank, and they don’t always provide the most affordable choice. Compare bank merchant accounts, as well as those offered through Merchant Service Providers (MSPs). Ask about any fees associated with merchant accounts in order to discern which provider best meets the needs of your business.

Finally, open your merchant account. Once you have compared and considered all of your options, applied and received approval, you can begin to accept credit card payments for products or services provided by your business.

While there are fees associated with accepting credit cards, businesses that accept credit cards usually see a decent rise in sales as a result. If you do your homework and select the right merchant account, the cost of credit card processing is outweighed by the increased revenue your business will begin to receive.

Get started!

There are many factors that should be considered before selecting a credit card processing company. The following tips can help you find the best credit card processing company for your business. Reviewing the smallest details in every aspect of the offers you find will bear huge rewards in the long run!

1. Outline Your Needs

Each business faces its own unique challenges and you should look for a credit card processing service that addresses your specific needs. If you’re the owner of a startup, ecommerce, or home-based business, your needs will vary and should be considered when looking at credit processing companies. For instance, do you need to accept international credit cards? Do you need Apple Pay combatibility? Are lower fees your number one concern? Or do your online sales require stronger security measures? Prioritize your requirements and get started on your search.

2. Get Consultations

Whether you are looking to switch companies or are just starting to accept cards, the companies you’re reviewing should offer you a detailed consultation. They should be able to help you determine your company’s needs and be able to let you know in detail how they will be able to meet those needs. The consultation should provide pricing, as well as any special features they can provide your business. They should be able to answer any questions you might have and show you the caliber of customer service they will be able to provide you down the road.

3. Sign on, Get a Specialized Installation

All credit card processing companies should offer professional installation of the equipment your business will need in order to process credit cards. The installer should be able to install any POS payment devices required, explain how the processor works and train you on how to use it. They should be able to show you all the functions the machine can perform and all the precautions you’ll need to take in order to make sure all of your transactions are secure.

4. Make Sure You Get Multiple Processing Options

While your business may only require online credit card processing right now, you probably don’t want to choose a company that can only process cards online. What happens if you decide you need to process payments on-the-go, and your company can’t handle mobile processing? What if you need a card reader, but the company you choose can only work via an online form? Think of your long term business needs and potential growth plan and try to choose a credit card processing company that can grow with your needs.

5. No Downtime for Online Shopping Cart Applications

If you process cards via a website shopping cart, you want to choose a company that can handle it – all the time. If your website displays a message that your “shopping cart is currently unavailable,” you’re inconveniencing your customers and losing sales.

6. When and How You Can Access Your Money

Most modern credit card processing companies will process credit card transactions once every 24 hours. There are still a few companies, though, that only process transactions once a month, which can be a big inconvenience for a small business owner. Think about whether or not you can wait to access money for a month or if you need a system that allows more frequent and instant availability of money once cards are processed.

7. Watch Minimum or Maximum Processing Requirements

Most credit card processing companies do not impose a minimum number of transactions per month, but some do. If you’re just getting started with your business or are small and unsure of how much sales volume you will have, pay close attention to any requirements when it comes to processing a certain amount of credit cards each month. For companies that do require minimums, there’s a good chance if you fall below the minimum, you will be faced with penalty fees. Also keep an eye on companies that limit you to a certain number of transactions or sales. If your business grows and you start processing larger volumes of credit cards, you could be faced with over-the-limit processing fees.

8. Hardware Requirements

If you are a business that requires equipment to process credit cards in person, keep in mind the price of the Point-Of-Service equipment and the ease of reprogramming it if you need to switch credit card processing providers. There are some companies that allow you to lease the equipment, but most of the time you’ll be better off financially if you purchase . At the very least, if you buy the equipment and need to upgrade later you can at least sell the items you no longer need to recover some of your investment.

9. Research The Hell Out of The Company

Whenever you consider entering into a contract with a company that will involve the exchange of money, it’s important first to determine exactly with whom you are doing business. Big, well known credit processing companies most likely have an established reputation or other clients you can talk with about their services. Smaller or less known companies can be researched via the Better Business Bureau or your state’s Attorney General’s Office.

Customer Service

Credit card processing companies must be able to do their job and help you do yours, as well. This means you will have to communicate with various representatives at different times throughout your business relationship. You want a company that has friendly and competent customer service representatives to ensure any potential problems or concerns are handled promptly and efficiently. The right processor will also have support and technical staff that has the experience and expertise needed to take care of any issues that may pop up.

Cost Effectiveness

Business owners will usually agree that the high cost of credit card processing is a major concern. Depending on contract terms and associated fees, merchants can pay anywhere from a few hundred dollars to thousands of dollars annually in processing expenses. As a general rule, the increased sales resulting from offering customers credit card payment options make the cost worthwhile. For some small businesses, however, each swipe of a credit card represents money lost to processing fees. In some situations, a merchant may discover credit card transactions end up costing more money in the long run. To ensure credit card transactions are not only affordable but also profitable, business owners must carefully compare all of their processing options. Careful consideration must be given to the processor and the terms and conditions of any agreement to see if the cost is worth the expense.

10. Review and Understand Your Credit Card Processing Fees

The fee structure and amounts charged from one credit card processing company to another vary widely. Review all fees associated with processing credit cards and ask questions about anything that is not clear. Online credit card processing has different fee structures than retail merchant accounts, so don’t assume if you’re familiar with an offline company that you’ll automatically know what to expect when processing credit cards online. Once you’ve gotten your first statement, take some time to look it over carefully.

11. Watch Out for Hidden Fees

Credit card processing can get quite expensive if you’re not careful. When comparing processors, pay close attention to the fees, both disclosed and those that may be hidden in the fine print. How much you pay per transaction and for other services will determine how profitable it will be to accept credit cards at your place of business.

12. Compare Costs

By now, you know the cost of credit card processing can range immensely. Before signing on the dotted line, compare the fees associated with credit card processing to ensure you’re getting the most value for your dollar. Ask about start-up fees, gateway fees and other monthly fees, which can quickly add up, costing you more money than you originally anticipated. While accepting credit cards will undoubtedly increase your sales, you do not want to spend more money than necessary on expenses associated with processing those sales.

13. Be Aware of Security Threats

Small business owners are often lulled into a false sense of security in regards to the security of their credit card processing system. Reports of security breaches in the news usually name major corporations or financial institutions, not mom and pop operations across the country. Unfortunately, a small business may be more vulnerable to hackers and other security threats.

Small businesses are not as likely to have the security measures and experts on hand to deal with problems like a major corporation might. Hackers have learned that it’s easier to steal from hundreds of small businesses than it is to target one large corporation. In the wrong hands, the names, addresses and credit card information of customers patronizing small businesses can be used to steal identities and access personal finances. Lacking the expert and financial resources of larger corporations, the attacks on small businesses are on the rise. Unfortunately, these are the very businesses that can least afford the cost of recovery from these security breaches. Investigating this type of incident can take months and cost thousands of dollars. In addition to any expenses associated with recovery, the loss of revenue and business following a breach can be the downfall of a small independent business.

This is a very real concern for business owners already struggling in a tough economy, but it can be addressed. Becoming familiar with methods used by hackers to gain access to computers and other equipment is the first step owners and managers can take to protect themselves. Proper training for all staff members in security issues is essential to ensure all employees are taking precautions to prevent an attack from hackers.

How to Avoid the Wrong Credit Card Processing Provider

To make sure you are getting the most value for your money, you have to first understand the common pitfalls that end up costing you more. Let’s take a look at what to avoid when selecting a credit card processing provider.

Picking the first provider you find – As with any other purchase, you should take the time to review several providers before making your final decision. If you think all providers are the same, you may find yourself paying top price when you could have saved money by shopping around.

Not reading the fine print – There are dozens of fees that may be associated with credit card processing. From application fees to monthly maintenance fees and everything in between, what you pay in fees is what makes the difference between an affordable provider and one that will make you dread swiping a credit card for purchases.

Renting equipment – Another way to save money on credit card processing costs is to invest in purchasing equipment as opposed to renting it. Few businesses ever return to not accepting credit cards, so buying equipment you need will be cheaper in the long run. Make sure you wait until you have done all your research and know what equipment you will need to ensure it’s compatible with all providers and software you use.

Fly by night businesses – There are plenty of con artists out there that set up shoddy businesses. This is especially true where large amounts of money exchanges hands. You want to research any company before considering them as your credit card processor. Check with the Better Business Bureau to see how previous and current customers rate the business. New businesses should be carefully researched, as they don’t have the years of experience or reputation from which to base a decision.

So you want to do business online. You might be considering using Google Checkout to process credit card payments from your online customers. Some predict Google Checkout will supplant Paypal within the next decade or so, a move that would likely involve Google purchasing eBay, since Paypal has fortified themselves inside the eBay infrastructure as a monopoly payment processor.

Introducing Paypal Here, a new mobile payment processing option.

How does Google Checkout work?

Google is applying the same steamroller approach to the online payment processing game that they have to their other conquests, a move that feeds nicely into their Google Shopping infrastructure and the rest of their apps. If you want to test their shopping experience out, purchase something you need on Google Shopping. You will get taken to Google Checkout to pay for the transaction and you can see how it works from an end-user perspective. It’s pretty seamless as far as online checkouts go, but still requires some of the cumbersome payment forms we’re used to seeing online.

How much does it cost?

Google is the master of all things web and they’re quickly overtaking all things mobile, as well. Their fees are on the low end and are certainly fair, and since their brand name is already a global icon, their market penetration is equaled by none. Their processing is clean, safe and easy to use and it’s still early for Google in this field, so expect them to get even better as years go on.

If you plan on buying and/or selling items for or from your business on ebay in the next 24 months, then you really do need to accept Paypal payments from your customers, as well.

Who will steal the mobile payment processing market?

There are indeed a plethora of options when it comes to online credit card processing, but Google and Paypal are the biggest players by far. With Google’s overall strength and domination of the internet game, it’s easy to bet on their future success in payment processing.

If you really want to hedge your bets, accept payments from all major credit cards, Google Checkout, Paypal and all the other small processors you can find with a significant customer base. That way, you’ll never lose a client due to lack of payment options and you can attract and serve customers from a wide variety of backgrounds and income levels, the key to any business’ success.