What is Credit Card Processing?
To increase sales, small businesses need a way to sell products and services, whether it is online or in retail stores. And many consumers today prefer credit cards. But, in order to accept credit cards as payment, small businesses need to set up a credit card merchant account with a third party credit card payment processing provider that will secure the merchant account.
However, not all third party providers work with all online gateway systems. When exploring options for credit card processing companies, be sure to select one that interfaces with the online gateway system.
Rate and Fees of Credit Card Processing
Many variables come into play when selecting a credit card processing provider. Rates and fees are attached to these variables. Variables such as the credit card processing company, life of the business, percentage of telephone credit card processing sales versus online credit card processing sales, type of business, years in business, credit rating and average amount in sales per month and per transaction.
Many major credit card processing companies offer discounted rates and fees to small businesses. While fees and rates vary among providers, researching the available options for the most inexpensive option is worth the time and effort. Try not to choose a high percentage unless that is the only option.
In Addition to Rates and Fees of Credit Card Processing
Do not get caught up with just the discount rate. There are other factors to consider when choosing a credit card processing provider like per-transaction fees that are paid on top of the discount for each transaction, monthly minimums, address verification fees and other costs. These can all add up to a significant amount and may end up off-setting a large or small discount fee.
Another note to consider is the cost of equipment. Some credit card processing companies offer sale or lease of equipment, but beware of leasing. Leasing may require a lengthy contract and may not be cancelable, which could mean disaster if the needs of the business change.
Mobile Credit Card Processing
Many small businesses require work on site, such as repair businesses or small business selling handmade items at craft fairs and bazaars. A mobile smartphone app that will enable credit card processing through a smartphone can be a huge benefit to a small business that needs to take credit card payment processing in varying locations.
Contracts with Credit Card Processing Companies
As with any contract, carefully reading the language and its implications is important. Some credit card processing companies require using an account at their bank, or may have monthly minimum amounts for sales. Also, explore what the company requires of small businesses and whether the company is a good fit. There are other options.