How to Set Up Credit Card Processing for a Small Business
Small businesses that accept credit cards for payment will make more money than those who only accept cash or checks. (See Reference 1 - Table 1 shows how e-commerce has increased each quarter.) Whether the business is a brick-and-mortar store or an online store, there are features to look for to set up credit card processing for a small business. Here are items to consider and compare when choosing a merchant and steps to set up the small business credit card acceptance system.
- Difficulty:
- Moderate
Instructions
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1
Ask questions as part of the credit card merchant selection process. Compare the answers for each merchant to assist in making an informed decision.
1.) What are the monthly fees, charge per transaction, percent of sale, statement fee, and all the other fees charged?
2.) How long is the contract and does it auto-renew?
3.) What do electronic invoices cost for an online store, and what is the process?
4.) Does the merchant provide an online shopping cart? What are the fees? Is there a volume charge? Can you use your own shopping cart when working with the merchant?
5.) Is there a minimum transaction amount needed to waive any fees?
6.) What type of equipment is needed, including the credit card terminal, and the costs?
7.) What are the business hours of the credit card merchant, and do those hours coincide with your business hours? Call them at different times of the day to see how your call is handled and how long it takes for a response.
8.) Is the merchant Payment Card Industry (PCI) Compliant?According to PCI Security Standards Council, there is a set of security standards for all merchants who accept credit cards.
Ask for references from the card-processing merchant. The provided references should be close to the size of your business and in the same industry. Always take the time to call and talk with the contact names provided to see how their experience is with the merchant.
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Know what solution will work for your business needs. There are different solutions available for credit card processing:
• Dedicated phone: Some terminals are dual processors allowing processing without tying up the telephone line.
• PC Desktop: software program that connects behind a firewall for secure and confidential credit card processing.
• E-commerce: Using a third-party processor such as PayPal or setting up a business website with a shopping cart.
• Retail credit card terminal: Provides debit and credit card transactions.
• Mobile terminal and cell phone: Hand-held terminals and cell phones with Internet access. -
3
Compare merchants to find which one will best fit the business needs. There are websites that provide comparative information on the most commonly used credit card merchants. These include Consumer-Guides, Recommended Web Tools, and InfoMerchant . Search for "merchant account" to find a listing of credit card merchants compared side by side. According to Export.gov, "To offer [overseas] credit card payment services, a company must establish a credit card merchant account with a bank. The bank will process the transactions in exchange for a fee. Companies should compare the fee structures of banks to see which works best for the size and number of transactions expected."
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Set up the business credit card processing system.
• Choose the merchant that fits your unique business needs and provides the processing option required.
• Apply for a merchant account.
• Sign the agreement with the merchant.
• Purchase the equipment and/or software needed for credit card processing.
• Get the proper training for using the equipment.
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Tips & Warnings
Small businesses can increase sales by giving customers more payment options. Set up a credit card processing for small business with due diligence by researching the merchant and the business needs. This will help to comfortably move into accepting credit card transactions for your small business.
