Merchant Credit Card Account Tips
When you get a merchant credit card account, you can finally start accepting credit cards from your customers. Despite the benefits, establishing and maintaining a merchant account comes with a number of challenges for which you should be prepared. Keep a few details in mind when you're managing a merchant credit card account.
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Get Your Credit in Order
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When you apply for a credit card merchant account, the merchant services provider must check your credit background, just as if you were applying to get a credit card of your own. You must provide a Social Security number on your application in addition to your contact data and information about your projected monthly sales revenues. So before you apply for a merchant account, check your credit report and score to fix any problems. That way, you'll increase the chances of approval.
Large and Small Transactions
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Understand the fee structure of credit card merchant services agreements to figure out which deal is best for your needs. Providers commonly charge a percentage of the transaction amount (about 2 to 4 percent), which is called the discount rate, plus an additional per-transaction fee of about 20 to 70 cents per sale. So if your average sale is large, choose the service that offers the lowest transaction fee percentage, even if the per-transaction fee is on the higher end, such as 70 cents. On the other hand, if your average sale is only a few dollars, seek an account with the lowest possible per-transaction fee, as that cost alone can eat up a significant amount of your profits from each sale. Crunch the numbers based on your average sale amount and the fee structure to determine which account to choose.
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Get a Signature
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Whenever possible, get a signature from a customer who uses a credit card at your business. You may need this signature to prove that the person did purchase an item from your store in case he disputes the transaction later. Successful disputes result in expensive charge-back fees. Check his identification as well to make sure that the name on the card matches. For online transactions, be sure that the customer enters a CVV (card verification value) and that both his name and address match the card account.
Don't Always Need a Terminal
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When you think of a merchant credit card account, you may automatically assume that you need a physical credit card terminal (also called a card swipe reader) to accept cards from customers. But in some case you do not need to buy this expensive piece of equipment. Some merchant services providers also offer virtual terminals, where you can simply type in the customer's card number manually into a computer system and still print a receipt for the customer to sign.
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