OK, so you just took that huge leap of faith and opened up your own business. Whether you are a retail storefront, restaurant, run a mail order business or are purely internet based, the ability to accept credit cards is critical to the growth and ultimate success of your business.
What's the bottom line? Offer your customers as many payment options as possible to avoid turning away business.
Credit and debit cards alone account for about one third of all personal consumption expenses in the US – a share that increases every year. And, in times of economic downturn like these, consumers have less cash flow and are putting more purchases on their credit cards.
With that said, following is a list of common question many new business owners have in the area of credit card processing.
What is the first thing I need to do to start accepting credit cards?
You will need a merchant service provider who will set you up with a merchant account for your business. This will give you the ability to accept credit and debit cards in person, online, or over the phone.
How long will it take before I can start accepting credit and debit cards?
With leading processors, you can get you up and running within the same day in many cases.
How much do I have to pay to accept credit cards?
Like anything, rates vary depending on processor you are dealing with and the type of business you operated (ie storefront, ecommerce, mail order, etc.) It is important to find a merchant service provider who not only offers guaranteed low rates, but will provide your business with PCI compliant equipment and knowledgeable 24x7x365 customer service and technical support.
How are credit cards charged?
Upon swiping a credit card in a POS terminal, the information is sent from the merchant to your credit card processor who in turn requests the money from the issuing bank, which is deposited directly into your bank account.
What if I own an ecommerce / internet business. Can I still process credit cards?
Depending on the processor you choose to process your credit card transactions, the answer is yes. For instance, at Federated Payments, we have a proprietary ecommerce gateway called SafePay that allows you to process transactions quickly and securely. This is also known in the industry as "card not present" unlike most storefront businesses that physically swipe the customer's credit or debit card.
What does PCI compliance mean for processing equipment?
The Payment Card Industry (PCI) dictates that all merchants, regardless of size or number of transactions that accept, transmit or store any cardholder data need to have terminals and card processing equipment that is PCI compliant to ensure the strictest security guidelines are adhered to.
These are just some of the basics for business owners who want to accept credit card processing to help grow their business and customer base.
Stay tuned for Part 2 of credit card processing basics … coming this week!