How Do I Accept Credit Cards For My Business?

To understand how do I accept credit cards for my business as payment for merchandise or services, the requirements are that, as a business owner, you will need:

  1. A merchant account
  2. Processing Equipment

With these basics you will be set to process credit cards. Sounds simply, right? Well it is…and it isn’t. Let’s review.

What Is A Merchant Account

A merchant account is a special bank account that allows you to accept and process credit and debit card transactions. It’s the bank account where your proceeds from a creditor debit card sale are deposited after all the steps and fees of the transaction are finalized. You can apply to your local bank for a merchant account, or you can research the many options offered by third party providers who will manage your credit card transactions for a fee. Typically you will find more value working with third party providers from both a cost and support standpoint.

While you are learning how do I accept credit cards for my business, to finalize the first step and get a merchant account, you will need to go through an application process. You’ll be asked to provide the bank or third party provider with:

  1. Company name; business address; business phone, business fax and website
  2. Full Name, social security number, and contact information of the officer(s)
  3. Business bank account information
  4. TIN/EIN (Tax Identification Number)
  5. Type of Business or Merchant Category Code (MCC)

Although this may not seem like a lot of information to you, this information is all a bank or credit card processing provider needs to define the legal properties of your business, the type of merchandise or service you offer, and your credit history. These three factors will determine the processing rates you’ll be offered. Does this mean if you operate a high risk business or have bad credit you’ll be turned down by the credit card processing companies? Not always. But you may be subject to higher processing fees, or you may be asked to set up a reserve account as insurance against the possibility of charge backs due to returns or other purchase disputes.

Getting approved for a merchant account, in order to understand how I accept credit cards for my business can take anywhere from a few days to several months or more, so don’t delay. You want time to review offers and decide which merchant account provider will work best whether you own/operate a brick and mortar business or you have an online shop. Read all the fine print and be sure you understand all the fees. Once you are approved for a merchant account, you will be able to process the most common credit cards, Visa and MasterCard, Discover, and American Express. American Express has a separate approval process however your third party provider will apply on your behalf. You will receive a separate merchant statement from American Express however your American Express transactions will be reflected in your monthly statement from your provider.

Processing Equipment

Once your merchant account has been approved, you’ll need credit card processing equipment or software to complete your transactions. A point-of-sale (POS) terminal reads your customer’s information from the magnetic strip on the back of his credit card, transmits this information and all the details of the sale to your credit card processing company, then receives the approval or denial for the purchase from the bank that issued the card. Online stores use dedicated software to transmit and verify credit card information. This instant verification process makes credit card transactions easy and secure.

Low Rates Are Not Always The Best Rates

In today’s economy, it doesn’t matter whether you’re a retail merchant selling your products at a physical location or online, or you operate a restaurant, or offer a service…you need to be prepared when your customer asks you the important question how do I accept credit cards for my business.

A merchant account and credit card processing equipment are the foundation for processing credit card transactions. But not all merchant accounts or processing equipment are created equal. Some providers offer lower per-transaction rates but tack on extra service fees. Some providers offer a simplified monthly rate. Some providers have restrictions on the minimum or maximum amount on a charge. Some providers can service credit cards issued from a foreign bank, while other can’t. And some processing equipment cannot process foreign-issued credit cards.

There’s much to be done before you open your doors — whether they are glass, wood, or virtual — to your new business. But it’s important to understand how do I accept credit cards for my business since it takes time to find the credit card processing company that best suits your business needs. Compare rates, check out their support services and reliability, ask questions, learn which fees are negotiable and which fees are not, and before you sign anything READ THE FINE PRINT!