You probably need Paypal
PLUS a merchant account. You will increase orders when taking
credit cards. The fees are a tax write off. The liability is
charge backs if a customer denies charges
1. WHAT is a Merchant Account?
A merchant account is the service you hire to enable you
to accept credit card payments for your site. It can be
through paypal (limited processing), your local bank, or
a processing company like Concord. Most will allow you
to accept Visa, MasterCard, Discover, and American
Express.
2. WHY do I need an merchant account?
Without it you can not accept cards for payments to your
business. Studies show that customers spend up to 36%
more when they pay with a credit card. I highly suggest
accepting paypal and also having a regular merchant
account to accept all other cards.
3. WHERE do I set up with a merchant account?
Apply with a merchant account (there will be a list at
the end). Usually there is a credit check. You will need
to give them your bank account numbers since they will
deposit your funds into your account?
4. FEES of a merchant account
One is the discount rate. This is the percentage of the
sale they take out before depositing into your bank
account. This is usually 2.5-5.5% of each transactions.
Ask the merchant account service what there rate will be
for you. It will vary depending whether you take cards
that are in your presence or just cards online or over
the phone..
Then there are transaction fees. These are usually 15-30
cents per transactions. These are taken out of your bank
account at the end of the month.
Then there is usually a statement fee. This is usually
$5-20 per month. Some services may also have a minimum
in fees each month. Ask your service if they require a
minimum in fees.
There will also be an added rate when you take business
credit cards and other "mid-qualifying" cards. This is
usually an extra 1% on some transactions. This is also
taken out at the end of the month.
5. CONTRACT - Is it required?
I suggest NOT signing up for a merchant account that
requires a contract. You want to be able to shop around
if fees change. Fees can change when visa/MasterCard
makes an increase. The merchant company then passes that
on to you.
6. PROCESSING - How do I process the cards?
Most merchant account allows processing one of three
ways.
TERMINAL - A terminal allows you to punch in the credit
card numbers into a terminal on your desk. This is
plugged into a phone line and it set up to automatically
go to your merchant account number. AT the need of each
day I do a batch processing (entering numbers) and the
amount for the day is deposited into my bank account
minus the discount rate. The fee for the terminal may be
one time or may be a monthly machine lease. I bought by
first refurbished terminal from the processing company
for $100.
GATEWAY - A gateway service is in addition to your
merchant account. It allows you to take and process
credit cards in real time online. When your customer
buys and enters their credit card info on your web site
it processes it immediately. If your customer puts in
wrong information then the card is denied and the
customer knows immediately. With a gate way there is no
need for a terminal. The gateway usually also comes with
an online terminal where you can enter numbers and
transactions of cards to take for phone orders or at
away events. The gateway will have a set up fee
($25-250) plus a monthly fee ($10-30).
TOUCH TONE - punching the numbers, and your merchant
account number into the telephone. Not all merchant
accounts allow this option because of the possibility
for error in entering numbers.
7. GATEWAY - What are the benefits?
WRONG INFO - no need to track down a customer who
entered wrong info when paying. It will not let the
transaction go thru until the customer corrects the info
FAKE INFO - the people making fake orders with fake
numbers will no longer be able to
KEY STROKES - When you have 20-30 orders a day entering
each of those transactions be hand can take a lot of
time. The auto processing of the gateway eliminate that
for you. The processing happens and is deposited into
your bank account even if you are not home.
VERIFICATION - The gateway verifies that the card is
real, matches the persons billing address and has the
card in hand (CVC code on the back of the card).
8. WHO should I sign up with?
Do your home work. Compare rates. Ask questions? Do not
sign a contract. Check below for my suggestions.
Merchant Options
PAYPAL - this is the easiest to get.
1.
Take checks
2.
Need the business/premier account to take credit cards 3. Fees 2.9% plus 30 cents per transaction 4. Join at
Paypal.com
2Checkout
- a beginning option 1. Take Visa and MasterCard through your web site
only 2. $49 set up
3.
5.5% plus 45 cents per transaction
4.
Automatically processes in shopping cart (gateway).
5.
Need premium mals cart $6 a month or other cart
6. No phone order
processing
7.
Join at
2checkout.com
Propay - a beginning option
1. Take Visa or MasterCard
2.
$1000 maximum per month in processing allowed 3. Take cards in person or online
4.
3.50% plus 35 cents per transaction
5.
$35 activation fee
6.
$10 statement fee per month
7.
Join at
Propay.com
This article has been written and copyrighted by Kay Green
