Small Business Credit Card Processing: How to Get Started

At some point in the life of a business, the threshold of sales revenue is reached where small business credit card processing is essential for continued growth. Certain types of businesses must take the leap to accept credit cards because sales are being lost because of the lack of this convenient payment method. Small business merchant services are available for every type of business regardless of the monthly sales revenue.

Reasons to Have Small Business Credit Card Processing

While there are some careful choices that must be made in selecting a small business merchant account, there are some immediate advantages that will be recognized by the business that begins to accept credit cards for purchases. Business owners who are uncertain if their business would benefit from credit card processing should consider the following benefits.

Increase Credibility

When a business accepts credit cards, customers trust that the business is legitimate and will be around in the future. Perception of the ability to support the products and services sold is an important ingredient for growth and building a customer base. When online sales are automated, sales will increase dramatically because the online community depends on the credit card companies to guarantee purchases against fraud and loss.

Reduce Paperwork

Accepting checks for payments is a very cumbersome way of handling money in a retail store or for mail orders. When the small business merchant account is used to process credit card payments, the amount of paperwork that is passed through the business will drop drastically.

Lower Risks

Every transaction is important to the revenue stream a company must have to survive. Lost transactions are much less likely when credit cards are accepted. Automated processes allow the customer to answer queries for validation of the transaction, and the money is deposited automatically into the checking account.

Quicker Payment

Waiting days for checks to clear and deposits to be made will not be necessary when credit card transactions are processed online. A point of sale terminal will process the transaction in the same way that a website does. The money is deposited quickly without a delay that used to be as long as five business days.

More Sales Revenue

Studies have shown that people will spend as much as 30 percent more when they use a credit card. Even when customers do not have sufficient funds to cover their purchase, they will buy future gifts and make spontaneous decisions that will increase sales totals.

e-Commerce

Companies that have basic websites can realize the benefits of a virtual storefront by allowing customers to complete purchases over the Internet. Wise merchants make shipping preparations, such as purchasing supplies and finding reputable shippers, prior to adding e-Commerce capability to the website. Search engines can bring people from all over the country to the website, and sales will happen.

Initial Steps to Take

There are some specific steps that must be taken to begin payment processing. Small business merchant services representatives will answer any questions that arise during the set up process.

Open a Merchant Account

Since there are a number of validation steps that must be performed, the first step must be to set up a small business merchant account. Banking information must be gathered and test transactions will be initiated, so some lead time is required. All of the details associated with the account are provided in written form. If anything is not easy to understand, questions will be answered.

Define Needs

Every company conducts sales through various avenues. Anticipate business growth and choose which services will be needed.

Conventional Payments With Equipment

Most retail outlets use a traditional card swipe machine to accept credit card payments. Because the card must be present to complete this type of transaction, it is considered the most secure type of credit card transaction.

Mail or Telephone Orders

MOTO transactions allow customers to order products without entering a brick and mortar location. There are some risks of fraud associated with this type of credit card purchase. Fees for this capability will be somewhat higher.

e-Commerce payments

Purchases completed through the company website can be just as lucrative as opening a second store. Many business owners are overwhelmed by the orders received when the website is opened for e-Commerce transactions.

Wireless Transactions

Smart-phones have made mobile credit card processing possible for merchants who participate in craft fairs and other mobile venues where people want to use their credit cards.

ATM Onsite

One of the ways to increase foot traffic is to place an ATM in the store. The machine is installed and maintained under a contract. There are certain types of businesses that will benefit from this innovative approach so ATM processing is always a good option.

Establish Company Policies

Specific credit card guidelines must be established to ensure that every transaction is handled with care. Customers rely on merchants to protect their personal information and credit card information.

Train Employees

Anyone who will conduct sales must follow the guidelines for processing credit card transactions. The integrity of the process depends on very accurate entering amounts and handling the receipts.

Practice Diligence

Credit card transactions completed should be verified at the close of business each day. Extra care must be exercised to verify that payment was received prior to shipping goods based on website orders.

Avoid Surprises

Small business owners are somewhat leery of the costs that can be incurred when accepting credit card payments. Knowledge of the written agreement will help the decision maker aware of the various fees that will vary depending on the type of transaction. When fraud is more likely to occur, higher fees are charged to cover the cost of that perceived risk. Everyone can assist with mitigating the risk of fraud and theft by adopting secure business practices that require customers to verify their identity and validating acceptance of funds prior to shipment.