Credit card processing for small business operations will most often require merchant account services. In this post we will take a look at credit card processing for small businesses to see what merchant account features to look for when starting a small business that will be accepting credit card payments. We will also take a look at what is involved in accepting online credit card payments as this will typically involve an online payment gateway and if your small business is using shopping cart software you will need to check for compatibility with that software as well.
One of the first things to find out is where you can get the lowest discount rate and processing fees that are associated with credit card process. Small business owners often have to pay slightly higher fees because they don’t have established credit, don’t do as much volume in sales every month and the total per transaction price is typically lower in a small business setting. In addition if the small business mainly accepts credit card payments over the phone or as an online credit card processing payment option, the fees may be a little higher as well. Typically the cheapest credit card processing for small business owners will be through actual terminals where the customer swipes the card in person. Having the actual card in hand where you can verify identity and signature makes fraud and credit card chargebacks much less likely.
Credit card processing fees also vary depending on the type of credit card the small business will be accepting. Visa and Mastercard generally charge lower rates and less fees than Discover and American Express. Along with the discount rate and processing fees small business owners will need to take a look at application fees, setup fees, and inital credit card processing equipment fees. Some of the best merchant account providers will offer promotions where you can apply for their service with no application fee and no setup fee. Some merchant account providers will allow you to lease credit card processing equipment but purchasing this equipment to begin with will save you money in the long run.
Be aware of all other credit card processing fees that a merchant account may charge, as these can really add up for a small business owner. Statement fees are often about $10 per month but more importantly small business owners will need to find out how long and how often they will receive the funds. Some merchant account providers use their own bank and you can only make withdrawals at certain points. Find out what holds they can place on your account and why to avoid any unexpected delays in transferring funds to your personal or business bank account.
As a small business owner there are a number of things you may not know or may not think of. If at all possible talk to others that run a similar type of business to find out their recommendations, the pitfalls they can help you avoid, and advice they can give you about credit card processing for small business owners. Check with the merchant account provider and the shopping cart software provider that you are using to make sure they are compatible. Talk to the merchant account provider about payment gateways, mobile credit card processing and wireless credit card processing to make sure that all your business credit card processing needs will be met.
Even for small businesses credit card processing is essential. The majority of purchases are made with either debit or credit cards and not having the ability to accept credit cards will hurt any small business. The more you know about credit card processing so that you can ask the right questions to help you find the best deal the better off you will be. Learn from others mistakes so that you can avoid the most common pitfalls that small business owners face when it comes to credit card processing.
For small business credit card processing we recommend: