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Title: How To Accept Credit Cards
By: Author: Matthew Coers
If you plan to do business online, then your website will need
to accept credit cards. For many, the idea of applying for a
merchant account sounds like a daunting task, but the truth is
that building an online store is incredibly easy these days. The
major credit card processing companies have improved and
streamlined the process of setting up accounts, and software
companies have had several years to improve their software to
the point that it is easy for non-technical business owners to
create and operate an online store effectively.
3rd Party Processors - The inexpensive way to start For the
beginning web entrepreneur, the most important issue in credit
card processing is how much product you think you can
realistically sell in a month. If you are selling less than
$1000 per month, then you will want to go with a "third-party
processor". PayPal is the most widely known and reputable third
party processor, and you can easily set up an account with them.
Unlike traditional merchant accounts, PayPal accounts are free
to set up and cost nothing on a monthly basis. You will pay more
per transaction with PayPal than you would with a traditional
merchant account, but for low-volume start-up businesses making
less than $1000 per month, you will gladly choose higher
transaction costs over account set-up fees, monthly account
fees, minimum charges, interchange fees, gateway fees, and
perhaps worst of all, account cancellation fees (just to name a
few).
Steps You Need To Take To Set Up A PayPal Account
Bank Account - you will need a bank account for PayPal to
deposit your funds into. Apply for a PayPal Account
Traditional Merchant Accounts If your processing volume will be
higher than $1000 per month, then you will probably want to go
with a traditional merchant account. Credit card processing
companies generally charge a minimum monthly fee that is
approximately equal to the amount of money you would pay to
process $1000 per month. Generally speaking you can expect to
pay around $50 per month in minimum charges for a merchant
account. As you process more, your costs will go up, but the
percentage of your gross sales that you pay for processing
should go down.
Steps You Need To Take To Set Up A Traditional Merchant Account
It is not difficult to set up a traditional merchant account,
but you will need to follow several steps in order to pull it
off.
Get a business license Get a business bank account at your bank
Make sure your web host supports your shopping cart system (you
might even be able to get your shopping cart system bundled in
with your credit card processing services for free). Try to
determine the amount of business you will generate. Your credit
card processing company will want to know how large each
transaction will be, and how many transactions you expect to
have per month. Negotiate with merchant account providers and
establish your merchant credit card account (see list of
merchant account providers).
Following are several merchant account providers you may be
interested in contacting:
www.PayPal.com PayPal allows you to accept payments instantly
without the need to set up special accounts or sign long-term
contracts. You will want to strongly consider using this one if
you are processing less than $1000 per month.
www.totalmerchantservices.com Total Merchant Services is one of
the largest resellers of merchant accounts both on and offline,
and are trusted by literally tens of thousands of businesses of
all sizes. They use First Data as their back-end processor.
www.merchantexpress.com This is a well-respected processor that
services both on and offline businesses.
www.expandyourbusiness.com CardService International provides a
very helpful eBook that you can download for free
Some Issues You Want To Consider
Generally speaking you will be more concerned with up-front and
recurring fees rather than the discount rate that processing
companies will quote most prominently. The hidden fees generally
eclipse the discount rates - especially for low volume start-up
businesses.
Try to accurately estimate your business volume when you fill
out your applications. The risk department at your processing
company can put a freeze on your account if your volumes move
significantly outside the estimates you have provided them.
If you do experience a sudden spike in orders, you should
contact the risk department of your processing company to make
them aware of the spike BEFORE it hits their system. They may
want to have you send them details about the orders and provide
proof that the orders are legitimate. As inconvenient as this
is, it is far better than getting your account frozen.
Make sure you understand what fees you will be responsible for
if you need to cancel your account before the end of your
contract. You may find that you need to shut down your account
for a variety of reasons, and you don't want to find out about
exit fees after you get the bill!
In conclusion, you should start off your search for credit card
processing by making a realistic estimate of your processing
needs. If you believe you will be processing less than $1000 per
month, then you will probably want to work with a third-party
processor like PayPal. If you will be processing more than $1000
per month then you will want to work with a traditional credit
card processing company (see list of processors above). You
should be more concerned with upfront and recurring fees than
with the discount rate. Once you have selected a processing
company, you will want to make sure you have your business
license and business bank account. Finally, you will need to
make sure that your shopping cart system supports your
processing company.
About the author:
Mr. Coers specializes in helping entrepreneurs build effective
web businesses. His website, http://www.profitchoice.com
contains useful articles and "how-to" guides to help
organizations build their brands and sell more effectively.
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