Credit Cards - How to take them for your business

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 http://www.2checkout.com/cgi-bin/aff.2c?affid=68084

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. Several other small fees for use
8. Join at http://www.propay.com

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MERCHANT ACCOUNTS 101
By Kay Green
Copyright 2005 - www.123HomeBusinessGuide.com

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 above for my suggestions.
 

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Article written by Kay Green, wife, mother of 4, owner of
My Precious Kid Child Safety Products http://www.MyPreciousKid.com
123 Home Business Guide http://www.123HomeBusinessGuide.com
This article is free for use when authors box is intact.
Kay is happy to answer questions about merchant accounts at kay@mypreciouskid.com