How Can I Accept Credit Cards for My Business Cheaply?
The popularity of using credit cards grew by more than 500 percent between 1990 and 2005, according to a Tower Group study. This means most businesses need to accept credit cards or lose business to competitors who do. Credit card processing can be expensive, sometimes prohibitively so. Fortunately, good negotiation with research into the kind of credit card services you need can help you find cheap ways to let your business accept credit cards.
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Instructions
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Negotiate your transaction fees. Two different kinds of fees apply to each transaction: a flat fee and a percentage. In most cases, you can lower one by agreeing to raise the other. If your business makes its money off of a few high-ticket sales, then you want a high flat fee with a minimal percentage. If your business makes many low-ticket sales each day, you want to minimize the flat fee and accept a higher percentage.
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Ask about fee variance. Some credit card processing contracts have hidden charges or higher rates for different kinds of transactions. Some examples include debit card transactions, transactions where the credit card number is keyed instead of swiped, transactions on weekends and transactions above a certain amount. Know these variances so you can avoid the premium rates whenever possible.
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Avoid signing up for an equipment lease whenever possible. Most credit card service companies offer a convenient equipment lease for your credit card machine. In most cases, these leases are far more expensive than the terms you could get for buying one outright.
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Negotiate service fees. In addition to your transaction fees, many credit card service companies charge several other monthly fees like service fees, statement fees and account fees. These can add up to $50 or more per month, but you can often get the sales rep to reduce or drop them entirely.
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Consider internet-based credit card processing. Many companies now allow you to process credit card orders via an internet portal, bypassing the need for expensive processing equipment altogether. This is appropriate for many business, although retail and food service businesses usually need a way to physically swipe a card.
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Tips & Warnings
Observe all other basic service shopping concepts. Get estimates from more than one company. Obtain and check references for all potential vendors. Avoid long-term service contracts when at all possible.
