Set Your Business on the Track to Success With Credit Card Processing
If you're looking to put your business on the track to success
, you need to let your customers pay with credit cards. After all, there are some 640 million credit cards in circulation in the United States alone. According to the Federal Reserve, those credit cards represent between $750 billion and $800 billion in purchases. And, as a successful entrepreneur, you want to get your share of those dollars spent.One of the easiest ways to accept credit card payments is to open a merchant account. These accounts will put all of your financial processes in the hands of one company, making life easier for you and making your business more efficient. The fact that you accept credit card payments will make you more successful in several ways:
Higher Spending Capacity:
The average American (in 2010) has four credit cards and combined access to $19,000 in credit. That means they walk into your business with the capability of spending more than the cash they have in their bank account.
Higher Sales Numbers:
You will experience higher sales because credit cards are a convenience. Your customers do not need cash in their pockets. Impulse spending can have a definite effect on your bottom line.
Always Open:
You will also be able to make a sale anytime and anyplace. If your business is online, your store is always open. A customer on the East Coast won't have to wait around for a West Coast business to open. Shoppers can order 24 hours a day and you can process that payment any time.
Real-time Processing:
Even if your customers order over the phone, rather than online, you can still take advantage of real-time credit card processing. You just need to log onto the virtual terminal and enter your customer's information.
Repeat Processing:
You can also use your account to charge your customers on specific dates for repeat charges.
Deferred Processing:
This offline sales system may be your best option if you don't offer online purchases. With deferred processing, orders are not processed until you have time to review the order. This method can be extremely beneficial with overseas orders.
Online Shopping Cart:
This system is something you need if you are going to accept online credit card payments. After establishing a secure server, you need to establish an online shopping cart that will display customers' orders, credit card information and the billing and shipping addresses. Once this information is stored, you can track their order history and calculate the costs.
Preventing Chargebacks:
A chargeback is the biggest problem you will encounter with credit card payments. These occur when a transaction is reversed. Instead of finding the money in your account, it is withdrawn from your merchant account. Chargebacks are the result of double-charging, an expired credit card, a bank mistake, a customer dispute or fraud. You don't want to experience chargebacks because they mean money out of your account. Also, if you have too many chargebacks, you can lose your merchant account.
If you want to avoid chargebacks, be sure you verify your customers' addresses to avoid fraud. If you are suspicious about an order, contact the customer right away. Additionally, always include an invoice with your shipments.
While merchant accounts will make life easier for you and your business, you need to be aware of the fees that can be charged for the services. Not all companies will charge the same fee and the percentages will differ. But here is a sample of fees that your company may be charged:
Discount Rate:
These fees will be the bulk of your costs, so it is an important rate to watch. The discount rate is the percentage you pay on each credit card transaction. You will probably pay less if you swipe your customer's credit card - and more if you are making an online transaction.
Transaction Fee:
This fee is the one you pay for each transaction, regardless of whether or not the transaction is approved. Fees are usually $.20 to $.30 a transaction, with higher fees for wireless transactions.
Other fees that may be charged include:
PIN debit transaction fees
Address verification service fee
Daily batch fee
Monthly statement or service fee
Internet gateway fee
Voice authorization fee
Monthly minimum fee
Surcharge, partially qualified and non-qualified fees
Application or setup fee
Reprogramming fee
Chargeback or retrieval fee
Annual fee
Cancellation or Termination Fee
Hidden Fees or Junk Fees
If all things appear equal - and you still don't know which service provider to work with - check with the Better Business Bureau. Are there multiple complaints, or are customers generally satisfied? You also want to check out the company's customer service practices.
Credit card processing is one of the best ways to increase and maintain business for your burgeoning company. Find the merchant account that is right for you today.
Set Your Business on the Track to Success With Credit Card Processing
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