How To Accept Credit Cards

If you plan to do business online, then your website will need to accept credit cards. For many, the idea of applying for a merchant account sounds like a daunting task, but the truth is that building an online store is incredibly easy these days. The major credit card processing companies have improved and streamlined the process of setting up accounts, and software companies have had several years to improve their software to the point that it is easy for non-technical business owners to create and operate an online store effectively.

3rd Party Processors ? The inexpensive way to start For the beginning web entrepreneur, the most important issue in credit card processing is how much product you think you can realistically sell in a month. If you are selling less than $1000 per month, then you will want to go with a "third-party processor". PayPal is the most widely known and reputable third party processor, and you can easily set up an account with them.

Unlike traditional merchant accounts, PayPal accounts are free to set up and cost nothing on a monthly basis. You will pay more per transaction with PayPal than you would with a traditional merchant account, but for low-volume start-up businesses making less than $1000 per month, you will gladly choose higher transaction costs over account set-up fees, monthly account fees, minimum charges, interchange fees, gateway fees, and perhaps worst of all, account cancellation fees (just to name a few).

Steps You Need To Take To Set Up A PayPal Account

  • Bank Account ? you will need a bank account for PayPal to deposit your funds into.
  • Apply for a PayPal Account

Traditional Merchant Accounts If your processing volume will be higher than $1000 per month, then you will probably want to go with a traditional merchant account. Credit card processing companies generally charge a minimum monthly fee that is approximately equal to the amount of money you would pay to process $1000 per month. Generally speaking you can expect to pay around $50 per month in minimum charges for a merchant account. As you process more, your costs will go up, but the percentage of your gross sales that you pay for processing should go down.

Steps You Need To Take To Set Up A Traditional Merchant Account It is not difficult to set up a traditional merchant account, but you will need to follow several steps in order to pull it off.

  • Get a business license
  • Get a business bank account at your bank
  • Make sure your web host supports your shopping cart system (you might even be able to get your shopping cart system bundled in with your credit card processing services for free).
  • Try to determine the amount of business you will generate. Your credit card processing company will want to know how large each transaction will be, and how many transactions you expect to have per month.
  • Negotiate with merchant account providers and establish your merchant credit card account (see list of merchant account providers).

Following are several merchant account providers you may be interested in contacting:

  • www.paypal.com PayPal allows you to accept payments instantly without the need to set up special accounts or sign long-term contracts. You will want to strongly consider using this one if you are processing less than $1000 per month.
  • www.totalmerchantservices.com Total Merchant Services is one of the largest resellers of merchant accounts both on and offline, and are trusted by literally tens of thousands of businesses of all sizes. They use First Data as their back-end processor.
  • www.merchantexpress.com This is a well-respected processor that services both on and offline businesses.
  • www.expandyourbusiness.com CardService International provides a very helpful eBook that you can download for free

Some Issues You Want To Consider

  • Generally speaking you will be more concerned with up-front and recurring fees rather than the discount rate that processing companies will quote most prominently. The hidden fees generally eclipse the discount rates ? especially for low volume start-up businesses.
  • Try to accurately estimate your business volume when you fill out your applications. The risk department at your processing company can put a freeze on your account if your volumes move significantly outside the estimates you have provided them.
  • If you do experience a sudden spike in orders, you should contact the risk department of your processing company to make them aware of the spike BEFORE it hits their system. They may want to have you send them details about the orders and provide proof that the orders are legitimate. As inconvenient as this is, it is far better than getting your account frozen.
  • Make sure you understand what fees you will be responsible for if you need to cancel your account before the end of your contract. You may find that you need to shut down your account for a variety of reasons, and you don't want to find out about exit fees after you get the bill!

In conclusion, you should start off your search for credit card processing by making a realistic estimate of your processing needs. If you believe you will be processing less than $1000 per month, then you will probably want to work with a third-party processor like PayPal. If you will be processing more than $1000 per month then you will want to work with a traditional credit card processing company (see list of processors above). You should be more concerned with upfront and recurring fees than with the discount rate. Once you have selected a processing company, you will want to make sure you have your business license and business bank account. Finally, you will need to make sure that your shopping cart system supports your processing company.

Mr. Coers specializes in helping entrepreneurs build effective web businesses. His website, http://www.profitchoice.com contains useful articles and "how-to" guides to help organizations build their brands and sell more effectively.

If you still have questions about Merchant Credit Card Accounts, you can access a free in-depth article on the subject here.

In The News:

pen paper and inkwell


cat break through


Small Home Business: Ad Copy Secrets

So it's time to invest some finances into advertising your... Read More

Do You Microbifer in Your Cleaning Business?

Microfiber cleaning towels have been around for about ten years... Read More

Discover How You Can Start Making Your Small Business Dream Come True

As a teenager I worked for my father's small business.... Read More

Combating Over Regulation of Small Business

Many small businesses do quite well due to the blood,... Read More

Preparing to Launch Your Small Business

Small business owners often enter their field with great expectations.... Read More

The Inside-Out Business Plan? -- Your Small Business Plan in 10 Easy Questions

Writing a business plan for your Solo Entrepreneur business doesn't... Read More

Pressure Washing; How to Bid Concrete Cleaning Jobs

Remember the cleaning business is all about time ratio to... Read More

Incorporating a Small Business: S corporations versus C corporations

If you've been considering incorporating your small business, you've probably... Read More

Hosted PBX, Is It Right For You?

"Order Now!" "Your Business Will Fail If You Don't Have... Read More

Small Business Opportunities Magazine Business

A Small Business Opportunities Magazine is one of the new... Read More

Dont Wait - Sell The Future Now!

Just as you are about to say "good-bye" to your... Read More

How to Curb Antique Shop Theft Inexpensively

If you have ever had your antique shop or mall... Read More

The Perfect Mission Statement

One way to determine your companies mission statement is based... Read More

Mobile Truck Washing, Case Study

Most folks in the pressure washing business are happier to... Read More

Franchise Buyers from Hell

I ran a franchise company for many years, a car... Read More

Do Home Businesses Complicate Small Business Debt Collection Laws?

The home-based business market, sometimes called the SOHO (small-office/home-office) market,... Read More

How To Create A Business Note That Is More Attractive To A Note Investor

You are selling your small business (business value under $1... Read More

Understanding Franchise Releationships in a Franchised Business

Now that you have invested your time, energy and money... Read More

Pressure Washing Graders and Tractor Motors

When pressure washing heavy equipment each piece of equipment has... Read More

Collect that Debt - Your Business Depends on it

The efficiency of debt collection is the difference between a... Read More

Taking Stock

Back when I owned an inventory-based business, one of my... Read More

How the Crab Effect Obstructs Growth and How to Conquer It

Some of the greatest words of wisdom for any man... Read More

Where Can I Get Clients From?

The following tips have come from a wide variety of... Read More

Operating Your Small Business ? Everything Really Is a Project

Do you operate your business as a series of projects,... Read More

Look Out for that Great Accountant

There are many factors to be considered when you are... Read More

Keeping Business Alive

Who is responsible for maintaining the business relationship?Nurturing a business... Read More

Awning Cleaning Business Case Study: Entrepreneurship 101

It is most fascinating to study how entrepreneurs spot opportunity... Read More

FTC Franchise Rule if Enacted will Trigger Hardship for Private Sector

The FTC Franchise Rule maybe changed, as the Federal trade... Read More

Are You Using a Chess or Checkers Small Business Marketing Strategy?

Until the day I learned to play chess I loved... Read More

Round Pegs In Round Holes: The Amazing Secret of Succeeding in Any Business Every Time!

Success is the desire of everyman on the face of... Read More

Your Business and the Story of a Tree; Part One

This morning, I went to take a short walk outside.... Read More

Are You a Small Business Lone Ranger? Take My 10-Question Quiz To Find Out!

So what exactly is a "Small Business Lone Ranger?" A... Read More

Where To Get Money For a Franchise Idea

How often have you thumbed through a business opportunity magazine,... Read More