Credit Card Service

Accepting Credit Cards

Credit cards are a convenience which is quickly replacing cash. With the introduction of the debit card, many shoppers no longer carry around checkbooks. In some locations, a business can actually lose money if they do not have a credit card service to process cards. However, every time a customer flashes that plastic, a percent of the sale goes to process the card.

Advantages

As a business owner, there are many advantages to accepting credit cards:

• Instant payments; no need to worry about bounced checks
• Opportunity to offer monthly services where you can automatically charge your customer's card
• Save money from having to send out monthly invoices and no need to wait for the checks
• Ability to take orders over the phone or online
• Ability to compete with other companies that offer credit card service
• Increased sales since many shoppers tend to buy more when they use a credit card that they can pay of later instead of requiring cash up front

Disadvantages

Though there are numerous advantages to accepting credit cards, there are a few disadvantages, mainly the processing fees, which can add up quickly. However, many consumers are turning towards only using their credit cards. So you need to weigh the cost of accepting credit cards to the potential loss of business and bounced checks.

Choosing a Credit Card Service

Now that you have decided to accept credit cards, you need to find a credit card service. You have a few options to look into to. Make sure you do your research and compare costs and services.

One place to begin looking is at your bank, though keep in mind they often outsource this service. You will also find numerous third party services. A search online will pull up different companies. However, be careful and proceed cautiously before signing up online for any services.

Fees

As with any service, you will be charged fees. With credit cards, you need to be aware of the different fees and what they stand for.

• Application Fee: Though most companies wave this fee, some charge you to process your application and make sure you are a legit company.
• Set Up Fee: This is the cost to set up your account.
• American Express® Setup Fee: It costs extra to accept American Express and is not included in most standard set up fees.
• Transaction Fee: This is the percent of the transaction that the credit card service keeps. Watch this rate carefully, it can range from 2% to 15%.
• Statement Fee: Most companies charge you to receive monthly statements.
• Equipment rental: Each company addresses the use of credit card machines differently. The machine is what processes the card. Though some companies will give you one when you sign up or include it in your processing fee, other companies will require you to purchase it outright or rent it monthly.
• Internet/phone order rate: This is the same as the transaction fee, though it may differ for phone and internet orders.
• Internet/phone order fee: Many companies charge a flat fee as well as the rate for orders. This can range from thirty to fifty cents.
• Cancellation fees: Find out if you are charged a fee for canceling or changing services.

Which Cards to Accept

As a business owner, you need to decide if you plan to accept all cards. American Express and Discover cards charge a higher percentage rate and therefore more expensive to accept, which is why you don’t find as many businesses accepting them.

Your main options are;

• Mastercard
• Visa Card
• American Express Credit Card
• Discover Card

Online Business

If you are small business that works online, chances are you do not want to pay a lot of money for a credit card service. However, since most of your competition readily allows instant transactions, you almost do not have a choice. Some companies, like Paypal, make it easy and convenient to set up an account.

If you plan on accepting credit cards, make sure you do your research. Ask for recommendations from other business owners and compare rates, fees and services. Make sure you compare the whole plan, and not just the per transaction fee. Once you decide on which credit card service is best for you, enjoy the freedom of instant payment.