How to Accept Credit Cards Quickly and Easily

Change never happens overnight. It only seems that way. New technologies take years to develop and design. It is only when they have been perfected that they tend to catch on. Even in a land that embraces innovation, new ideas are slow to sink in. In this article, we will discuss an idea whose time has finally come. Electronic payments have been around for years. American Express and Diners Club came up with the concept way back in 1950. They issued a limited number of credit cards to their best customers When the magnetic strip was introduced in 1970, Americans were offered another viable payment option. The credit card was quick and easy to use, but it was only accepted at certain restaurants and department stores. Plastic gained acceptance slowly as customers started to demand another payment option at the register. It was not until 2003, fifty-three years after they had been introduced, that electronic payments finally overtook paper payments. Cash is no longer king. The credit and debit card reign supreme. What changed? Not much, really. Businesses simply did what they have always done—they listened to their customers. Shoppers wanted the option of using credit and debit cards, and stores shrewdly accommodated them. Plastic payments have gotten so popular that it is almost impossible for a business to compete if they refuse them. Merchant Service Accounts The average American consumer has eight credit and debit cards in her wallet and she uses them for sixty percent of her retail purchases. When online, she uses plastic over ninety percent of the time. As you might expect, this puts a cash-only businesses at a considerable disadvantage. Where to begin? When a business owner makes the decision to accept credit and debit card payments, he must apply for and obtain a merchant service account. These accounts are issued by banks and other authorized financial institutions. There is no guarantee that the applicant will be accepted. The service provider will examine the credit and business history of the applicant and decide whether or not they are a wise investment. If they are approved, the applicant will receive several vital services from the provider. First and most importantly, the provider will either approve or decline each and every electronic transaction. If the transaction is approved, the provider will send an electronic bill to the customer’s credit/debit card company. After the balance is remitted, the provider will deduct certain service fees before the funds are deposited in the merchant’s bank account. As important as they are, a business owner should not sign on with a provider simply because his application is accepted. Since each provider offers different rates and fees, it is important to shop around. Finding the best rates and the most appropriate plan can take time. Many merchants make the mistake of hastily signing a long-term contract only to find there were much better deals to be had. What to Look For? The two most common fees that every merchant is charged are the transaction fee and the discount rate. The transaction fee is assessed for each electronic purchase and it is typically quite small. The discount rate, on the other hand, is a percentage of the total sale price. Then there is the monthly fee. This is the fee that trips most merchants up. More often than not, the discount rate will not vary much between providers. A solid business that does not have much debt and accepts payments in person can typically find an attractive discount rate. But the transaction fee and the monthly fee can have a profound effect on your overall monthly service charges. As a general rule of thumb, a merchant who has a high monthly sales volume should look for a provider that offers the lowest possible transaction fees, even if that means accepting a slightly higher monthly service fees. On the flip side, a company that has low monthly sales volume should find a provider that offers higher transaction fees and lower monthly service fees. Following this simple advice should save both companies money. As we alluded to earlier, there is a big difference between companies that accept payments in person and those that complete orders over the phone or the Internet. In short, there is a much lower risk of fraud when a transaction is handled in the flesh. The cashier can ask for ID, he can check to see if the signature on the receipt and the back of the card match, and he can even call the credit card company to make sure the customer is who he says he is. Online merchants can’t do any of that, which is why they have much higher service charges across the board. The risk of fraud on the Internet is so high, in fact, that discount rates are typically five or six times higher than those at traditional brick and mortar stores. Take these tips and points into account when picking out the best merchant account for your business.