How Do I Accept Credit Cards?

One of the best ways to boost your sales is by allowing more payment options to your customers. In this highly competitive market, businesses cannot think of surviving the competition without providing the facility of credit card payments to their customers, be it online or offline.

In fact, the success of their business now depends on their ability to accept all types of credit cards. However, many merchants or vendors still have a few questions about accepting their payments through credit cards.

Lets us try to understand their questions briefly:

Merchants usually have the following questions:

  • What are the prerequisites for accepting a card?

  • How to obtain a Merchant Account?

  • How much payment do they have to make to get the Merchant account?

A few years back it was a bit taxing for the merchants to accept any type of credit card, and also many merchants did not qualify for accepting credit cards from their customers. However, now the scenario has changed and any merchant can easily obtain their merchant account, and carry out their businesses through credit cards.

There are different options available in order to accept payments through credit cards. We are however, quite familiar with the system of having a traditional merchant account, or by opening a PayPal account.

Let us try to understand the basic qualification required for opening the merchant account. Firstly, you need to have good credit history, in order to get the account at lesser processing charges. There are different rate of processing fee, in case your credit report is poor. Besides that you must fulfill the following conditions

  • You must be a US resident

  • You must have a checking account

  • You must be above 18 years of age

Traditional Merchant account

In case you are interested to open your account in the most cost effective method, then you can obtain it through any of the Merchant account providers. Such providers act as the middle man between the bank, who is handling the business and your business.

In order to maintain the account you have to pay the minimum amount of $10 per month and the transaction fee, which is some percentage of the amount of the transaction. You also have to sign an agreement for the period of three years.

You must also check the fees in case you want to terminate the contract before three years. Also, in order to process the credit card you will need to keep special equipment. Any merchant, who is really serious about running his business with the help of the credit card must follow this procedure, as it is the most practical way.

Other type of Merchant Accounts e.g. PayPal

In case you want to run your business with the help of eBay then you can open your PayPal account to transact.

People are familiar with only the basic services of PayPal account, but by using this facility you can obtain a number of solutions. Accepting payment by credit card is very easy with PayPal account, but in this case the customer must also have their own PayPal account.

PayPal also provides many other services for an additional fee. You can sell any virtual terminal product with the help of your computer and accept the payment with credit cards. With their "Web payment Pro" facility you can accept any credit card payment from your website. In order to avail this extra service you need to pay an additional amount of $30 per month, which is a much better option as compared to the traditional Merchant account.

Sometimes, the rates announced for processing credit cards look unbelievable. However, if you scrutinize its terms and conditions in detail then you will find that the rates offered are not really applicable for everybody. Therefore, whenever you come across any such advertisement then you must look for the following points:

Sometimes, the rates advertised are meant for "Card Present" transactions. In such cases, the card should be such that it can be directly swiped with the machine, which is connected with the bank. In this case your card will be swiped with the machine, which is connected through a phone line by using either GPRS or CDMA wireless machine. If your card does not fulfill this condition then the rates are not applicable to you.

This is basically done in order to avoid the chances of fraudulent payment. Therefore, you must carefully check the terms and conditions before jumping into buying after seeing the advertising rates, which is sometimes very tempting.

At times, the rates are different for volume purchase and different rates are charged for average buyers. Some of the business transactions do not take place too often. Also, in some of the business the profit margin is too low. The rates charged will therefore differ from business to business. If you study the rates offered by various kinds of business very closely then you can understand this logic of rate variation. Therefore, before you decide to buy any item study the offer carefully.

Merchants who are going to introduce credit card for transaction of payment must interact with the card processing companies to understand your business properly. Otherwise you will find it very difficult to compete with many of your competitors while offering your price. As a businessman you will never like to fall in this trap.

Accepting credit card payments with the help of the telephone line is a very secure method of transaction. Most of the reputed companies, who offer you this service, will ensure that you are protected against any kind of fraud.

In case you find that their services are not completely foolproof then you can change your service provider. Many of the service companies do not charge any monthly minimum charges for their equipments. Those who are in the plumbing and electrical business or in any other trade or craft of direct sales can take up this kind of service from good companies.

Nowadays, accepting credit cards with the help of the telephone line is not very expensive. You should search for good companies, who offer you this kind of service to run and expand your business.


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