How to Accept Credit Cards for Business

Sign informing customers that a business accepts credit cards.

Just about every business accepts credit cards. It's a necessity for business owners to accept credit cards because nowadays, people are using debit and credit cards to make purchases, in lieu of cash. In some cases, failure to accept credit cards can mean the difference between making and losing a sale. Additionally, accepting credit cards is looked upon as a way to make shopping more convenient for your customers.

Things You'll Need

• Bank account

Instructions

Accepting Credit Cards For Business

1. Decide what credit cards you want to accept. Major credit cards include Visa, MasterCard, American Express and Discover. Most merchant services companies will require you to accept Visa and MasterCard.

   You'll have the option to choose whether you want to accept American Express and Discover. American Express and Discover charge merchants more money to accept their cards than Visa and MasterCard. Conduct an informal survey among your customers to determine if they would pay with a Discover or American Express card.

   This information should help you decide if it's worth it to accept American Express and Discover. As a general rule, it's always best to accept all forms of payment -- you don't want to lose a sale because you don't accept the right credit card.

2. Research different merchant service providers and banks. Many independent companies can provide you the ability to accept credit cards. Not all are created equal, in terms of price and services provided.

   Find out about transaction fees, rates, monthly processing requirements, setup and cancellation fees, and equipment costs. In addition, find out how each company handles chargebacks, and what measures are in place to protect you from fraud.

   Make sure that the companies you speak with have 24-hour customer support, just in case you experience problems processing a credit card. You should speak with a minimum of three merchant service companies, with five being an ideal number.

3. Decide what company is best to handle your credit card processing needs. Make sure you have all costs and fees in writing. Any reputable bank or merchant service company will put quotes in writing for you.

   Ask how long it takes for your funds to be placed in your company's bank account after a credit card is processed. The time varies from company to company, but 24 to 72 hours is the standard time frame.

4. Submit your financial information to your merchant service provider. You'll be required to complete an application providing information such as business name, duration in business, and type of business.

   If you're starting a new business, you'll be asked to provide your Social Security number. This allows the merchant service company to run a credit check on you, determining your creditworthiness. A low credit score may make it more difficult for you to open a merchant account, particularly if you're a new business.

   Established businesses may need to provide two years of company bank statements and tax returns. If you've previously had a merchant account, that may serve as an indication of your creditworthiness.

5. Finance your equipment needs. You'll be able to lease or pay cash upfront for your credit card processing equipment. Your lease payments may be 100% tax-deductible if accepting credit cards is considered a necessary cost of operating your business.

   If you're making an upfront payment, you'll be able to pay for your equipment with a credit card, or a direct draft from your bank account. Most merchant service providers can have you processing credit cards within 72 hours of completing your application, and paying for your credit card equipment.

Tips & Warnings

• Certain businesses, like pawn shops, and travel agencies, are considered high-risk businesses. If you own a high-risk business, you may have difficulty finding a merchant service provider because high-risk businesses are more susceptible to fraud and customer chargebacks.

References

• Business Owner's Toolkit
• Buyer Zone
• Resource Nation

Resources

• Merchant Express