As a business owner, it is important to give your customers the option of paying with a credit card. This allows them to feel safer with their transactions and more comfortable with large purchases. Particularly if you’re looking to start selling your product online! But how do you get started? Read on for a simple guide to getting your small business set up to accept credit card payments.
Set up a merchant account. This can be done through your business’ financial organization. The process usually involves filling out an application, and will generally approve you to accept Visa and Mastercard. If you want to accept other credit cards like American Express or Discover, this requires an additional application.
Get equipment to process credit card transactions. After your application has been approved, you will be able to either buy or rent the proper processing equipment (most likely a card reader attached to a modem) through your bank or financial organization. By having a card reader, you will be able to tell if a credit card is approved or declined right when you swipe it. Remember that it is your responsibility to make sure the card holder’s identity matches that on his/her card. You can verify this by either asking them to show their ID, or matching the signature on the back of their credit card to their receipt. Don’t forget that a credit card is invalid if it isn’t signed on the back!
Set up the ability to accept online payments. If you have a website where people can purchase (or perhaps your entire business is e-commerce), it may be better to set up an online payment system using PayPal to accept credit card transactions. When setting up a PayPal account, you will need to include your business info, bank account number and credit card info. The fees you’ll incur while using PayPal have been found to actually be a bit lower than similar services. Also, many consumers like using PayPal because they know the name and trust them since their personal financial information is never shared with the business. It kind of acts like an online payment security blanket!
There will be fees. Many credit card processing accounts charge a fee per transactions, usually a percentage of the purchase amount. There is also sometimes a flat fee on top of that, such as $0.20 per single transaction. In addition, some processing accounts have a monthly, quarterly or yearly recurring fee. There is also usually a fee for refunds made on cards. You should definitely shop around to see which credit card processing accounts are right for your business.
Understand the rules. Note that many credit card processing companies do not allow for the retailer to pass their fees back to their customers – so by all means, don’t even think about it. Growing your business to accept credit card payments will grow your business, but it comes with a price. Understand the by getting this privilege, you are accepting responsibility to pay for it. Abusing this could let to your merchant account being taken away from you.
Does your small business accept credit card payments? What other advice would you give business owners looking to set up a merchant account? We’d love to hear from you! Leave a comment below or connect with us on Facebook, Twitter or Google+.
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