Accepting credit cards has never been easier. Technological advances and the Internet has made it possible to accept credit cards through the Internet or have the credit card processing machine access the merchant network via the Internet instead of telephone lines. This makes processing the credit cards much faster than in the past.

Fees

Many small businesses avoid accepting credit cards because of the fees associated with the process. However, the number of people who use plastic solely and don’t carry cash mean that not accepting cards could be costing much more money than the fees associated with accepting cards.

Credit card processing fees range from 2.5 to 5.5 percent of the sale. This gap in the lower end of fees to the high end of fees means that the business owner must research the different credit card companies in order to find the one with the best rates. While this may seem like a negative aspect of accepting credit cards, there is no risk involved with credit cards such as having a check bounce or having to wait for the check to clear the bank in order for the funds to be accessible.

Getting Started

It is easier than ever to start accepting credit cards. There is more than one way to accept credit cards in today’s world. One is to use the typical method of a credit card terminal and having merchant status set up with the various credit card companies. The second is via the Internet and one of the many gateways that allow for credit cards to be processed and deposited into an account, such as PayPal.

The following information details the traditional methods of setting up merchant status. If the small business has a predominantly online presence then PayPal and other options can be easily implemented.

The first thing a business must do is acquire merchant status and have a merchant account at one of the many banks that issue certain credit cards, known as acquiring banks. This step can be done by either working with one of those banks or setting up an account with a credit card processing company, an option that eliminates some of the steps involved in getting started.

Setting up a merchant account is not simply a matter of filling out an application and everything falls in place perfectly. In much the same way that credit card applications are checked for credit worthiness, the merchant application is checked thoroughly to ensure that the credit card company is not going to lose money on charge backs.
The credit card companies will verify that the business is solid. This is simply to determine if the company has many refunds to customers which in turn would mean lost money to the credit card company.

Compare Merchant Accounts

It is important to compare merchant accounts when starting out. Many small businesses make the mistake of thinking they should simply stay with the bank that they do business with currently. However, the fees that are charged for merchant accounts may be much less at other banks. The services that are offered with the merchant account should also be compared. The business owner should be prepared to ask for better rates and negotiate with the provider.

There are some things that should be considered when comparing the offers, such as:

• Rate of the fees and how it is assessed.
• Software or hardware provided such as the processing terminal, paper for the machines, support should it go down, Internet access to the account and more.

The comparison of various services should be made and listed so that an overall picture is seen. This allows the business owner to make a decision that is based on facts and not guesses.

Integration with Current Programs

Small businesses considering credit card systems need to also remember to take into account their current accounting software and whether or not the system they are considering will work with it. This shouldn’t be a difficult part of the process since practically all business accounting software has built in components that are designed work with credit cards.

Watch Business Grow

Once a merchant account is established and the credit card company has set up the equipment, it is time to start accepting credit cards and watch business grow. Advertise that credit cards are accepted by putting the credit card logos on all marketing materials and invoices and business will increase dramatically. Credit cards are the number one form of payment in business and should not be overlooked when setting up accounting practices.