Accepting Credit/Debit Cards for Your Business:

Why should a small-business owner accept credit cards as a form of payment?  There are dozens of reasons.  First and foremost, research shows that credit cards increase the probability, speed and size of customer purchases.

It is important to conduct all due diligence in evaluating a processing partner. Look for a transparent processing company that will help control costs by better navigating the often-confusing credit card industry.  Ask questions, it is important to understand who you are choosing to work with.  Here are five important factors to consider.

1. How much are the fees and other costs?

Credit card processing fees can be up to 5% on everything a company earns from its credit and debit card sales, according to the U.S. Small Business Administration. However, some companies might charge much less than others while offering the same products and level of service.

Here are some of the main credit card processing fees to look out for:

  • Interchange fees: This refers to a fee that is charged for every transaction you process, and it’s paid by the payment processor to the card-issuing bank. Interchange rates are publically available and are updated every six months by Visa, MasterCard, and Discover. Fees are determined at the transaction level and depends on the combination of your industry category code, the method by which you accept the card (i.e. in person or over the phone), the card product you accept (i.e. credit or debit cards) and it sometimes even varies by transaction size.
  • Monthly statement fees: The credit card processing company might charge you monthly statement fees to cover the expense of mailing you a statement. It costs about $10 per month on average.
  • Application and setup fees:You may face a fee just for applying for the processing service. Setting up the equipment that’s necessary to accept credit cards may cost you extra, too. This fee can vary widely, depending on company.
  • Monthly minimum fee: This refers to a minimum amount in fees the processing company must collect in any one month. If you don’t meet or exceed this minimum amount, the processing company will charge you to meet the minimum. For example, the company’s monthly minimum fee may be $25; if your total credit card transaction fees one month are $20, the company will charge you $5 to make up the difference.
  • Early termination fee: Some processors may charge you this fee for early cancellation of your contract. The fee can cost anywhere from a few hundred dollars to thousands.

As you can see, there are quite a few credit card processing fees your payments company may charge. It’s important to make sure you understand all the fees and service terms; if you have any questions or concerns, ask a company representative for an explanation. If they can’t provide you a detailed explanation on any costs or fees, it might be time to move on to the next processor.

2. How long will it take to set up?

It should be easy for you and your employees to set up the processing technology. Find out how long the payment processor will take to set up your account and install the equipment so you can plan accordingly. If it seems like it might be a complicated task, make sure the processor can provide some support.3. What are the accepted payment types?

If you run a retail business, you might want to make sure the new payments processor accepts all major credit and debit cards so you don’t have to turn away any customers – after all, what’s worse than that? You might also want a system that accepts prepaid cards and gift cards, or an electronic benefit transfer, or EBT, depending on what type of business you operate.

4. Does it accept new payment technologies?

Does your business have a lot of tech-savvy customers? If so, you might want a payments processor with near-field communication (NFC) technology, so you can accept digital wallets such as Apple Pay or Google Wallet. These devices allow customers to make purchases with a simple touch of their smartphone or tablets.

Apple Pay, for example, works with most major credit and debit cards and now accounts for two out of every three dollars processed through contactless payments.

5. How helpful is customer support?

What if you run into technical problems with your credit card machine? Or you have questions about your monthly billing statement, such as confusing fees?Hiring a payments processor that provides 24/7 customer support and direct help from an account representative can solve these issues. In addition, a helpful account representative should be able to explain any fees or costs you don’t understand. And in the end, it might be worth paying a little more in fees to avoid unreliable, confusing service for your small business.

Accepting credit cards gives you the chance to increase sales by enabling customers to make impulse buys even when they don’t have cash in their wallets. Your processing partnershouldhelp improve your cash flow. Choose someone whowill fund your money the next day instead of waiting for a check to clear or an invoice to come due.


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