How to Process Credit Card Payments
Processing credit card payments allows a business to increase sales and its customer base. Up-and -coming businesses may gain a competitive advantage by accepting credit cards when their competition does not. Allowing credit card payments enables customers who do not prefer cash or checks to make purchases. According to Intuit Small Business, credit cards increase average sales, allow for impulse purchases and improve the customer's buying power. (See References 1) Processing credit cards requires establishing a special bank account and paying associated fees.
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Instructions
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Open a merchant account with a merchant service provider. A merchant account is a special bank account that allows the processing of credit cards. (See References 2) The merchant account communicates between the store and the credit card providers. Establish a merchant account at your local bank or through online companies.
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Set up a "payment gateway". Merchant account providers require a payment gateway in order to process credit card payments online. Payment gateways take the form of an online order form or a shopping cart. (See References 2) Contact the merchant account provider for assistance in setting up the payment gateway.
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If you do not qualify for a merchant account, consider collaborating with a third-party credit card vendor. These companies accept and process credit card payments on your behalf and provide step-by-step installation instructions for your website. Examples of third party vendors include PayPal, CCBill and Google Checkout. (See References 3)
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Pay any applicable set up and monthly maintenance fees. Merchant accounts and third-party vendors require upfront setup fees as well as maintenance fees. In addition, they charge per-transaction fees.
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Decide which credit cards to accept. Per-transaction fees are dictated, in part, by which credit card you process. (See References 2) Visa, Mastercard, American Express and Discover all charge different fees to merchant account providers and third-party vendors and vendors pass these costs on to you. Choose which cards, with their associated fees, to accept.
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Tips & Warnings
Merchant accounts have high upfront costs, but typically charge lower per-transaction fees than third-party vendors. (See References 2) Analyze the expected number transactions and associated fees to determine which type of account fits your business best.
Look for hidden fees from merchant account providers or third-party vendors before signing any agreements.
References
Resources
- Photo Credit three credit cards image by Aleksandr Ugorenkov from Fotolia.com
