The choice to open up a new business is a huge one, naturally. It only makes sense that you’d come against some difficult decisions that aren’t simple to make. Some of those decisions represent concepts you’ve never considered before. One of them is about the logistics in regards to how you plan on handling payments from your customers. To be more specific, you’ll really need to decide whether or not you want to operate on a cash-only basis or take the jump and get your business equipped to accept payments via credit cards and debit cards.
Many small businesses – especially those located in small towns and mostly frequented by local customers – often wonder why they should go through the process of getting set up to take credit card payments. However, they should really consider the fact that we’re living in the 21st century. That being the case, very few people truly pay for things in cash anymore. By not setting up a merchant account and accepting card payments, you may be shooting your business in the foot when it comes to money making and future growth.
Why does my company need to be able to take credit card payments?
For a while, some business owners may have been wondering if perhaps the current surge toward plastic as the prominent means of payment was just a blip. However, at this point, it’s pretty safe to say that the electronic age shows no signs of regressing back to cash only at any point. Plastic cards are now much more than just an alternative to cash and checks. They are now the norm.
That being the case, your customers will be walking into your establishment expecting to be able to pay with their credit or debit card. They most likely don’t even carry cash anymore, so when they find out that you don’t take credit, you run the risk of losing their business to your competitors.
Not only are credit and debit cards far more convenient than carrying around a wad of cash and making constant trips to the ATM, but they’re a lot safer and more secure as well. If you drop your cash on the ground or wind up getting your pocket picked, it’s simply gone. If you lose your credit card or fall victim to credit card fraud, there are safeguards in place that guarantee you’ll get your money back. Credit cards are a safer means of doing business for you as a merchant as well, so bringing your business up to date sooner rather than later really benefits you to the same degree it does your customers.
How do I get set up to accept credit cards as a form of payment?
In order to get your business set up to accept credit cards as a form of payment, you’ll need to apply for a merchant account with one of the many merchant service providers out there today. A merchant account is a specialized type of bank account that you apply for in much the same way you would a checking account or a line of credit.
First you decide which provider (or providers) you want to apply with. They’ll want to look into your status as an individual, as a creditor, and as a business owner, so expect to be asked to provide a comprehensive collection of statistics and informative tidbits about your business. Your potential service provider will want to see documentation on past sales numbers and they’ll want to hear from you in regards to how you plan to help your business keep growing once you’re approved for your merchant account. They’ll want details about what kinds of products and services you offer, as well as the prices attached to each. They’ll also want to know some sort of approximation in regards to how many credit card and debit card transactions you plan on conducting over the coming months or years. If your company or business has a website or plans on dipping its toe in the e-business pool, expect to be quizzed about your plans in that arena as well.
Those applying for a merchant account should also expect service providers to look into their credit history. They may be calling your business associates, business partners, and any references you’ve provided in order to gain some insight into how you are as an entrepreneur.
Once you’re approved for your merchant account, your business will be assigned a unique merchant ID that will then enable you to start taking advantages of the new merchant services you’ve gained access to. The merchant service provider will from then on be handling the processing, approval, collection, and (possibly) the transfer of any and all funds your business takes in via plastic in the future.
Does it cost me anything in order to take advantage of merchant services?
All merchant service providers will charge you something in exchange for the valuable service you’re getting. Some will charge an initial set-up fee or even an application fee, although this is by no means something you see across the board. All will charge a small fee per transaction which will usually correlate to a percentage of sales taken in via credit card or debit card. Many merchant service providers will also charge monthly or yearly dues from there on out in order for you to keep taking advantage of the services.
It’s important to note that not all merchant service providers charge the same amounts though. Some will offer you free set-up. Some will charge lower monthly/yearly usage fees than others. As is the case with any sort of service you’re looking into, it really pays to look around and do a little comparison shopping. You can even enlist the help of websites and third party services that can help you locate exactly the right provider for you so that you can ensure you’re getting the absolute most bang for your buck.
In addition to merchant service fees, you should also factor related expenses and bills into your plan. You will need to either purchase or rent credit card processing machines, of course. In some cases, you may be able to purchase POS software to help convert your computer into a payment terminal.
What should I look for in a merchant services provider?
Just as you would do when choosing a credit provider or any other company to associate with from a financial standpoint, you want to make sure you get the absolute most value for your dollar from your merchant services provider. The following are just a few of the things you might want to look for:
- Definitely take a look at rates right off the bat. Wherever possible, choose a company that doesn’t charge you in order to apply for the service and that offers you free set-up as well. Periodic service rates are pretty much par for the course, but start up fees and such are not.
- You want to make sure to go for a service that provides you with plenty of quality support should you need it. A toll-free service line should be included with your service, as should access to a 24/7 online help database and service option.
- Many merchant services can assist you in setting up loyalty card programs or gift card options for your customers. Both are options that are all the rage these days for the way they help you create a faithful existing clientele that comes back to you for their needs again and again. Gift cards help ensure that happy customers pass on the word about you and your services to potential new customers as well.
- Last but not least, you definitely want to at least consider prioritizing merchant service providers that give the option of borrowing against future credit card transactions by way of cash advances. Sooner or later, every business finds itself in need of extra funds, whether that’s to restock inventory, refurbish the place to bring it up to code, pay off taxes, or upgrade electronics to improve efficiency. With a cash advance option in place, you don’t need to go through the hassle of applying for a separate line of credit or a business loan. You’ve already gone through the rigorous approval process when you were approved for your merchant account in the first place!
Where do I find a good merchant services provider that will allow me to accept credit cards?
One place to look into applying for a merchant account is with your existing bank. However, as you can see, another excellent place to start is by researching information on how to get your business set up to accept credit cards by leveraging the power of the internet. With the help of a site like this one, you can even make short work of the process by getting yourself matched with some of the top providers out there today. Naturally this helps make comparison shopping and decision making a lot simpler and less time consuming!
