A small or mid sized business that selects a credit card processing service, solely because of its cheap merchant card processing rates, is making a grave mistake. Credit card processing fees are only a small part of the complete merchant processing solution you buy from the merchant services provider. You must evaluate the other services offered by a merchant account services provider before signing up.

Follow these guidelines to assess a credit card processing solution:

Verify the customer support

A small business may need the help of customer support often in the initial days of using the credit card machines and installed software. It is important that customer support personnel respond without delay, or you may lose the sale. A credit card processing company that has 24×7 customer support is always preferable since an immediate solution is required when you run into credit card processing issues.

Always check the quality of customer support b cuy asking for current customer references. This will give you an idea of the credit card processors attitude towards customer support, promptness of their response and what they are being charged for it.

Enquire about the security features offered for card-less transactions

Most online credit card processing agencies offer security features for card-less credit card payments to reduce the risk of credit card fraud. Security features include encryption of credit card information, address verification, IP address blocking, etc. Advanced security options make the credit card transactions safer, but may result in additional credit card processing costs. 

Understand the credit card processing fee structure

Credit card processors charge fees other than the discount fee. Make sure all the fees are included in the contract and that there are no hidden fees or ambiguous terms and conditions.

Verify the reputation

The market is full of small business credit card processing services offering cheap rates. Some of these may not be legitimate. Do not deal with a credit card processing company without checking its references. If the agency does not have any customer referrals, check out its rating with the Better Business Bureau. Any complaints or disputes against the agency should be listed here.  

Get contact names, numbers and email addresses

The merchant must have details such as the name of the credit card processor, physical address, a contact person’s name, phone number and email address. Having the contact details of other company representatives is also a good strategy to assure fast and timely response.

Contracts with credit card processing companies are usually multi-year and you would not want to be tied down with a below average merchant credit card processing company. You need to be wary of agencies that offer cheap credit card processing initially and then start springing the hidden costs. It is important to verify the reputation and research the fee structure of credit card processing leads before signing up with one that fits your business needs. A reliable and efficient credit card processor will not only help you increase sales revenues, but also provide financial protection against credit card fraud.

Introduction 

Are you planning to accept credit cards for your business? You will need the services of a good merchant services provider to start you up. With so many credit card processing companies in the market, and without adequate knowledge of this trade, it is difficult to decide which merchant services provider is the best for your business.

A business that accepts credit card payments pays a small fee to the merchant services provider for each transaction. Though it is inevitable for businesses to pay for the convenience of credit card processing as it directly contributes to increased revenues, there are ways to save on credit card processing.

In this article, we attempt to address the most common questions merchants have about how to save on credit card processing costs, including:

1. What is credit card processing?
2. Why is credit card processing a critical element of businesses today?
3. What are the types of credit card processors?
4. How should you select a credit card processing company?
5. What makes a business high risk?
6. What is needed to qualify for a merchant account?
7. How much does credit card processing cost?
8. How to lower your credit card processing costs?

What is credit card processing?

A credit card transaction starts with a swipe at a credit card terminal or by the entry of the card details (card-less transaction) into a billing system. Before the amount moves from the card holder’s account into your business account, certain validations, checks and deductions are made. All these tasks are managed by the credit card processor.

Merchant card processing companies make sure credit card transactions are processed accurately and on time, for a fee. The fine points of credit card processing can get confusing, and businesses save themselves the bother by hiring a processor. In fact, internet businesses rely on credit card processing companies totally for their every day functioning.

Why is credit card processing a critical element of businesses today?

It is critical for growing businesses to offer customers the option to pay with credit cards. As more and more customers get comfortable with cashless transactions, businesses are pulling all the stops to make credit card transactions secure and painless. Online transactions (cardless) are quite common today with the surge in e-commerce websites.

Cashless transactions benefit your business. Funds are transferred into your merchant account on time with hardly any effort from your side. You also open your doors to a new segment of customers – a definite plus point for every business.

Credit card companies and banks encourage credit card usage by offering deals such as heavy discounts on products and services, gift vouchers, and prepaid services. Businesses can add their own incentives to existing offers to make credit card purchases irresistible to customers.

What are the types of credit card processors?

There are a variety of credit card processors to choose from. These are discussed below.

Independent Sales Organizations (ISO)

ISO services are like brokers. They link merchants with banks. ISOs have a contract with a bank to sell services to them. They hike the merchant service fees when negotiating with the merchant and close the deal. This is how they make profit. ISOs are popular as they take care of all the details for the merchant.

Banks

Enquire about merchant card services at your existing bank. Some banks offer merchant account services as part of a business account deal. Understand that most banks will outsource credit card processing to an external agency as they may not have the expertise to handle it in-house.

Credit card companies

The major credit card companies – Visa, MasterCard, American Express and Discover – have their own rules for servicing merchant accounts. While American Express sets up your merchant account directly, the other three brands expect you to have an account with an intermediary organization before setting you up for credit card processing. Large businesses that see monthly credit card sales in hundreds of millions usually take up this credit card processing option.

International merchant account companies

Businesses can opt to get their credit card processing done by offshore or international merchant account providers. As these merchant account companies are not regulated in the same way as those in the United States, they are risky. Typically, businesses that have poor credit history, are placed at odd locations, involve huge risks or have been refused credit card processing services by conventional agencies go for this option.

Registered credit card broker

These brokers are also independent sales organizations representing several ISO processors at one time. They have accounts with other credit card processing companies. Their services are personalized and they offer small businesses the same level of service provided to larger concerns. All organizations should be registered with Visa and MasterCard sponsored by ISOs. Small and mid-sized business can opt for this more expensive option if they want custom-made services.

How should you select a credit card processing company?

Keep the following points in mind in your selection of a credit card processing company. There are many important factors that are best checked out at the start of a business relationship.

1. Survey the market

Do a market analysis of various credit card processing companies. Compare services on the basis of:

1. length of service
2. rates charged
3. terms and conditions applied to the merchant account
4. previous record
5. specialization
6. familiarity with your business type, size and sales volume

2. Understand the fee structure

Credit card processors charge a number of different fees. You should understand all the fees so there are no rude surprises when you get the bill from the company.

3. Know the time to receiving funds

Swiping a card takes seconds. It takes much longer for the funds to reach your merchant account. Transactions are processed in batches. The industry standard for transferring funds to the business account is 2 business days. This varies across credit card companies. American Express delivers funds in 2-30 days.

4. Read the fine print

Many businesses make the mistake of not asking enough questions about the terms and conditions set down in the contract.  Make sure the credit card processor cannot take advantage of any clause to fleece you. It’s best to have your business lawyer review the contract before signing it.

5. Assess the customer service

You will be contacting the credit card processing company’s customer support service often, at least initially. In case of any problems during a credit card transaction, it should be possible to get immediate assistance or you will lose a sale. Always get some contact names and numbers so that you don’t waste time in customer call queues when help is required urgently. Know the working hours of customer service personnel. A 24×7 service is best.

The credit card processor should understand the importance of customer care and offer you some guarantees such as response time, query resolution, etc. Ask about the knowledge levels of its representatives.

6. Security of transactions

Reputed credit card processing companies work with you to mitigate credit card fraud. They make card less transactions safer by using Secure Socket Layer (SSL) protocol for transmitting credit card information on the internet. This is the minimum security required for online credit card processing transactions.

7. Get references

Ask the credit card processor for references. Call past customers and get reviews of the processors’ services, customer care, security provisions, error rates, lapses, etc. At a minimum, check the processor’s rating with the Better Business Bureau. If there are any complaints or recorded disputes, question the credit card processor. If their replies are not satisfactory, keep looking around.

What makes a business high risk?

This question is discussed here because a high risk business pays higher than average for credit card processing services. Some factors that make a business a high credit risk include:

1. poor credit history
2. type of business
3. high volume of chargebacks (indicative of customer dissatisfaction)
4. potential of credit card fraud (high in businesses such as adult websites)
5. money-back guarantees

Good credit card processing companies specializing in internet transactions help high risk businesses reduce credit card fraud and repeated chargebacks to some extent. Credit card fraud is the biggest risk in credit card transactions. Credit cards are stolen and used to make large purchases, often leading to heavy losses for the credit card processing service and the business.
High risk businesses are charged higher processing fees. They may also need to build a reserve with the credit card processor to serve as a buffer. A high risk business has to bear this cost to avail credit card processing services.

What is needed to qualify for a merchant account?

All merchant account and credit card processing services will perform a thorough background check before accepting your application. This is mandated by law after 9-11 to prevent money laundering. The processor will:

1. check your credit history
2. verify your business is not prone to large volume of chargebacks (because of credit card fraud or a mistake by your ISO)
3. ask for credit references from your suppliers (to vouch for your name)
4. reference from previous credit card processor (if any)
5. past statements to check credit history and chargebacks

If your business falls into the high credit risk category, you are not disqualified from approval. You will have to pay more than non-risky businesses but a good credit card processing company will help you reduce your risk by addressing specific problems with your credit. Do not be misled by companies that promise a 99% acceptance rate. Instead, look for companies that have a history of helping out businesses in your situation.

How much does credit card processing cost?

The cost of credit card processing is an important factor in selecting a merchant account service. You should consider the costs of equipment and the applicable processing fees.

Cost of equipment

The credit card terminal used to swipe cards is the biggest upfront investment. However, you can choose to lease a machine for as low as $20 a month if you are only planning to try out credit card processing. The cost of a new terminal varies with the sophistication and features included. Basic machines cost from $200 to $750; wireless models can go up to $1000. Depending on whether incorporating credit card processing is a short or long term plan, you can lease or purchase equipment. Many merchant account service companies include terminals in their business package.

Online businesses may not need terminals. They will have to purchase a virtual terminal program and payment gateway to process cardless credit card transactions on their computer.

If you accept credit card orders over the phone or mail, you need to enter credit card data manually. These options are risky as there is the possibility of the funds, verified at the time of sale, not being available at the time the charge is processed. 

Merchant Card Processing fees

Al credit card processing services charge a discount fee. This is the percentage charged for each transaction processed by the company. Charges levied by the credit card processor will depend on:

1. your credit history
2. transaction amount
3. type of transaction – cardless or card present

The discount fee for transactions in which the card is present typically ranges from 1.5-2 percent. Card-less transactions incur a fee of 2.2-3 percent. Monthly minimum fees of around $20 are also common.

There are other charges, most of which are determined by the credit card companies such as Visa and MasterCard. A credit card processor may charge an application fee (non-refundable) that can range from $200 to $500. Some companies charge setup fees, activation fees, customer service fees, programming fees, pass-through fees and more. Make sure all the fees are specified in the contract.

You should shop around for the best deals for processing credit cards. Be wary of providers that include a large upfront fee in the agreement. Many reputed credit card processors will not charge activation or setup fees. Their services will be reliable and the prices fair. Working with a trustworthy processor is more important than paying cheap transaction fees.

How to lower credit card processing costs?

1. Ensure transactions are processed within 24 hours 

Credit card sales transactions should be batched out every day, within 24 hours of the sale. An older transaction will incur higher credit card processing fee. Avoid this eventuality

2. Reduce the monthly minimum charge

The contract with the credit card processor specifies a monthly minimum charge. In the event that your monthly sales fall short of this number, you pay the difference. If this happens too often, ask the credit card processing company to lower the monthly minimum value. Most credit card processing companies will negotiate seeing your past sale records. If they don’t, there are other agencies that will be more than willing to help you out.

3. Print the business contact on customer receipts

Businesses usually have customers sign a receipt for a credit card transaction. This is a proof of sale that customers keep in case of chargeback or any other issue. Ensure the credit card receipt shows your business address and contact number, and not the credit card processors contact information. In case of any query, the customer should call you. If they call the credit card processing company, you will be charged for information retrieval.

4. Negotiate merchant processing fees

Nobody is doing any favors by extending credit to customers. Each time a customer uses a credit card, the card company makes money. By accepting credit cards, you are in fact generating more business for the merchant processing company. Negoitate lower merchant procesing fees in exchange for the business you generate for them.

5. Avoid card less transactions at the store

If your business location has a card swipe machine, avoid card less transactions. The rate of credit card transaction fees increases with the risk involved. Manually keying in credit card information also results in higher risk. Swiping cards through the processing slots incurs the cheapest credit card processing fee. If the magnetic strip of a credit card is damaged, ask the customer for an alternative credit card. Usually, customers will carry more than one card. If not, you have no choice but keep this practice to a minimum.

6. Review monthly statements carefully

If you have had a long relationship with the credit card processing company, there is likelihood that they may have hiked rates at some time. You can only know this by reviewing monthly statements minutely. Ask questions about downgraded transactions and unexplained fees. If there are too many of these, consider switching to another credit card processor.

Are you tired of credit card processing companies throwing in some unexpected merchant card services fees? Are you confused by the number and types of merchant services fees involved in credit card processing for small business? Do you want to know the pricing for various merchant card processing fees? Do you want to know the fee rate that serves as a safeguard against fraudulent providers? If yes, then read on to learn everything you need to know about credit card processing fees.

Application Fees: Some credit card processing services charge you a fee for processing your merchant account application. Most reputed providers do not opt for charging you up-front. In case your provider charges you an application fee, make sure it is refundable to avoid wasting hundreds of dollars on a rejected application.

Startup Fee: This is the setup fee for creating a merchant account and configuring the credit card terminals. A startup fee of up to $25 is justified.

Statement Fee: Merchant card processing companies usually charge $7-$10 for monthly statements of your transactions at the end of every billing cycle. Statements include the number of cards swiped along with timing and dates on which the cards were used.

Monthly Minimum: To earn some assured revenue during slow business periods, merchant processing companies charge a monthly minimum fee when your transaction fees fall below a certain amount, usually $25.

Transaction Fee: It represents the minimum fee, usually 10 to 30 cents for every transaction. Transaction fee depends on the method of payment.

Discount Rate: It is percentage of each transaction charged by your credit card processing company and normally varies between 1.5 to 3 percent. Discount rate is based on mode of payment and is lowest for debit cards. It successively rises for diner’s club cards, Visa and MasterCard, Discover cards and American Express cards.

Qualified Rate: It represents the minimum discount rate to be charged for most secure transaction types like physical swiping of credit cards.

Non-Qualified Rate: It is about 1-2 percent higher than qualified rate and represents the lowest discount rate for processing least secure type of transactions, like transactions proceeding without address verification.

Batching Fee: This is the small daily fee incurred when you send your terminal-based transactions to the acquiring bank.

Chargeback Fee: You are charged a certain fee for each successful or unsuccessful reversal of charge. Your merchant processing company will allow you to void a few transactions every month before asking you to pay the charge back fee.

Gateway Fee: To enable processing credit cards online, merchant services companies offer web services like setting up and maintaining an online shopping cart for accepting and monitoring credit card payments. Charges for these services are included in your payment gateway that costs around $10 a month.

Authorization Fee: You must pay this fee for every transaction sent to the bank for approval or rejection, irrespective of the outcome. The fee is usually covered within the discount rate but some merchant card services companies charge a voice authorization fee, each time you authorize a credit card over the phone.

Termination Fee: If you terminate your contract before the agreed upon time, usually 1-3 years, you are charged a termination fee of $100-$300. Be wary of credit card processing providers who do not charge a termination way as they may incur the expenses through other hidden fees.

As a general rule of thumb, merchant processing costs you around 2 percent of your total credit card sales volume. Be careful of providers who offer you rates considerably lower than prevalent market rates. Get all credit card processing fees in writing before signing a contract with a credit card processing company to estimate the cost of credit card processing for your business and protect yourself from any hidden fees. Carefully assess the credit card processing costs and its value for your business before making any decision.

A small or mid sized business that accepts credit card payments pays a small fee to the merchant card processing company for each transaction. This small fee adds up to a sizeable amount every month. Add to this the monthly statement fee, merchant account setup and other one-off charges; and you end up paying quite a bit to the credit card processing company. Though it is inevitable for merchants to pay for the convenience of credit card processing as it directly contributes to increased revenues, there are ways to reduce the merchant services fees.

Here are few tips to lower credit card processing costs and increase your profit margins:

Ensure transactions are processed within 24 hours

Credit card sales transactions should be batched out every day, within 24 hours of the sale. An older transaction will incur highercredit card processing fee. Avoid this eventuality

Reduce the monthly minimum charge

The contract with the credit card processor specifies a monthly minimum charge. In the event that your monthly sales fall short of this number, you pay the difference. If this happens too often, ask the credit card processing company to lower the monthly minimum value. Most credit card processing companies will negotiate seeing your past sale records. If they don’t, there are other agencies that will be more than willing to help you out.

Print the business contact on customer receipts

Businesses usually have customers sign a receipt for a credit card transaction. This is a proof of sale that customers keep in case of chargeback or any other issue. Ensure the credit card receipt shows your business address and contact number, and not the credit card processors contact information. In case of any query, the customer should call you. If they call the credit card processing company, you will be charged for  information retrieval.

Ask for reduced merchant services fees

Nobody is doing any favors by extending credit to customers. Each time a customer uses a credit card, the card company makes money. By accepting credit cards, you are in fact generating more business for the merchant  services credit card processing company. Ask for cheap credit card processing rates in exchange for the business you generate for them.

Avoid card less transactions at the store

If your business location has a card swipe machine, avoid card less transactions. The rate of credit card transaction fees increases with the risk involved. Manually keying in credit card information also results in higher risk. Swiping cards through the processing slots incurs the cheapest credit card processing fee. If the magnetic strip of a credit card is damaged, ask the customer for an alternative credit card. Usually, customers will carry more than one card. If not, you have no choice but keep this practice to a minimum.

Review monthly statements carefully

If you have had a long relationship with the credit card processing company, there is likelihood that they may have hiked rates at some time. You can only know this by reviewing monthly statements minutely. Ask questions about downgraded transactions and unexplained fees. If there are too many of these, consider switching to another credit card processor.

They key to reducing credit card processing rates is to be aware of  these simple tips, being knowledgable of the current merchant card processing fees in the market and negotiating with the credit card processing companies to get the best deal. Always be on the lookout for credit card processing for small business offers that suit your needs, sales volume, and type of transactions.

Are you planning to accept credit cards for your business? You will need the services of a good merchant card processing company to start you up. With so many credit card processing companies in the market, it is hard to decide which merchant card processing solution is best for your business. A good way to start is by comparing the fees and cost of merchant card services offered by various credit card processing companies. Following are some of the costs involved in accepting credit card payments for your business.

Cost of Credit Card Machine

Credit card machines for small business can be the most expensive investment. The point-of-sale (POS) credit card terminals cost anywhere between $150 and $700. Wireless models fall in the range of $500 to $1000. Higher end credit card machines with added features cost even more. The price of the credit card terminals depends on how useful the additional features are, such as security features etc.   

Depending on your business plan, you may choose to buy, lease or get a free credit card terminal with your merchant account. Investing in credit card machines is cheaper in the long run, but if you are unsure of your long term plans it is better to lease the machines. Leasing charges are usually in the neighborhood of $20 per month.

Many credit card processing companies include installation of POS terminals in their package, along with creating merchant accounts for the business. This may be cheaper than purchasing terminals separately. However, you also need to consider the merchant card processing charges for other services such as payment gateways, compatibility with an existing shopping cart application, virtual credit card terminals, etc.

Installing POS terminals for processing credit cards is a safer option than processing the card remotely over the phone or the internet. The verification process takes longer on the phone and it does not assure the availability of funds when your company actually processes the charge. As the verification and processing are carried out at different points in time, there is a risk of chargebacks.

Merchant card processing fees

Merchant card processing companies charge various kinds of fees. The discount fee is the main fee by which credit card processors make a profit. Credit card processing companies charge additional fees for various services, and this is where it gets subjective. Businesses have to take a call on the value of the additional fees before signing onto the contract.

Merchant Discount fee

The discount fee is the percentage of money that the card processing company charges per credit card transaction. The percentage is decided by the credit ard processing company after considering your credit history, amount of credit card sales and the type of business. Broadly, there are two discount fees — one for businesses that offer signature-less services, such as payments over the internet or phone, and the other for businesses that process the credit card physically at the store location. The discount rate for the first kind of business is higher, 2%-3%, as it carries a greater risk. Otherwise, discount rates are 1.5% to 2% per credit card transaction.

Other fees

Credit card processing companies can charge a number of other fees such as merchant account fee, activation fee, statement fee, monthly minimum fee, payment gateway fee, charge back fee and termination fee. The application fees charged by some merchant card processing companies are as high as $300, and non-refundable. Some credit card processing copmanies charge a monthly statement fee of $20. Merchants need to weigh the value of a service for their business and agree only to the ones that make sense.

Do not work with merchant card processing companies that asks for an inflated fee to be paid up-front. The best credit card processing companies make sufficient business without charging additional fees. The contract should include all the fees the merchant card services will cost your business such as customer service fee, payment gateway fee, etc.

The credit card processing fee is a small cost to pay for the increased sales that your business will enjoy by accepting credit card payments. Survey the market to compare credit card processing costs  to find the best solution for your business. Also, remember that paying a higher nominal transaction fee in exchange for reliable 24/7 merchant service is not always a bad deal.

Merchants don’t have an option when it comes to whether to accept  credit card payments any more, as more and more customers are using credit cards to make purchases. Processing credit card fees for merchants have also reached affordable levels, making it possible for businesses of all sizes to take advantage of this sales boosting tactic. Selecting the right credit card processing service for your business is a challenging task.

Here are seven processing credit card tips to help you select the right merchant processing service for your business:

1. Bank or independent merchant card processing company?

Most merchants usually have an account with a bank, and let the bank handle its credit card processing requirements too. Banks offer good rates to preferred customers who have had a long relationship with the bank. Independent credit card processing companies may offer the same services at better rates. Additionally, businesses benefit by having more than one merchant card processing account for their commercial solutions.

Banks typically take up credit card processing for large businesses only, and offer limited payment gateway access. Independent credit card processing companies, on the other hand, offer processing credit card solutions to businesses of all sizes and types. They can provide solutions for electronic, manual and automatic credit card payments.

2. Understanding processing fee structure

A merchant card processing company earns mainly through the discount fee that is a percentage (1% – 7%) of each credit card transaction. Agencies may also charge other fees such as account initiation fee,  monthly minimum fee, chargeback fees, etc. Merchants must ensure that all the fees, terms and conditions are included in their contract.

3. Specialized credit card processing companies

Some credit card processors specialize in providing solutions for specific types of businesses such as retail stores, restaurants, internet companies, etc. Each industry has unique needs and risks. Businesses with ecommerce applications need a merchant processing service that assures secure transactions to mitigate credit card fraud. Businesses with high risk profiles are charged more.

4. Settlement processes

Settlement is the process of moving funds from the merchant account to the checking account of the business. Credit card processing companies move funds daily, weekly or monthly. They either deposit credit in a batch after deducting fees or on a per transaction basis. Some merchant card processing companies retain a percentage of the settlement as a cushion against charge backs. Verify the frequency and amount of settlement so that it meets your cash flow needs.

5. Cost of Credit Card Terminals

Credit card processing needs installing credit card terminals at the business location. Businesses can purchase or lease hardware depending on their business plan and volume of credit card sales. Some credit card processors provide free credit card terminals with the merchant account while some integrate their system with the pre-installed machinery at the merchant’s end. Either choice will affect monthly fees and discount rates. Weigh your options before choosing either course.

6. Cost of electronic payment gateways

 Merchants that use ecommerce applications need their merchant accounts to be linked with electronic payment gateways. Credit card processing companies provide payment gateways as part of the package or set up and install payment gateways of the merchant’s choice. Cost of the service varies with features such as security, encryption, SSL to reduce the risk of credit card fraud in online payments.

7. Term of contract and cost of add-ons

The contract between merchants and businesses is usually for longer than a year. Terminating a contract prematurely incurs a hefty fee. If a merchant plans to expand the business to other locations, it is recommended that it select a processing credit card company that offers discounts for additional terminals and merchant accounts.

Different types of credit transactions incur different discount fees. Higher the risk, higher the fee. Card-less transactions cost more than those in which the processing of credit cards at the physical location. Keeping this in mind, sometimes it makes more sense to have separate merchant accounts for each type of credit transaction.

Good, reliable services that help your business grow profitably are as important as getting a good processing credit card rate. Get the most out of your credit card sales by following these tips to select the right credit card processing company for your business.

Credit card transactions have become a common means of payment for business transactions. Earlier, banks were the primary credit card processing companies. Improved technology and the internet have allowed third party agencies to enter this domain, and they are offering faster and cheaper services to merchants.

Credit card processing rates vary across all the vendors. They can depend on sale amount, sales volume, credit ratings of the business owner, and purchase or lease of point-of-sale (POS) machines by the merchant. Merchant processing companies can charge a percentage of the sales amount per swipe, a flat fee, a stepped fee or both a fixed fee and a percentage of the sales amount.

Businesses should verify their financial statements periodically, or at least once a year, to make sure they are not paying more than required as credit card processing fees. This review can often result in the business changing its merchant processing company to improve its bottom line.

Though a good merchant processing account is agreeable, other factors also need to be looked into incase you plan to change your merchant card processing service:

Compatibility with existing hardware and software

The merchant processing companies should have a system that works well with the existing hardware setup at the merchant’s business. Credit card processing is available on phones, computers, wired and wireless machines. Similarly, the software for sales entry may allow return charge, subscriptions, and recurring charges. The credit card processor should be equipped to process these instructions accurately.

Support for online shopping cart applications

Many businesses have web sites that allow online shopping through a shopping cart application. The credit card processing service should be able to support the application. Downtime of applications is not just a coding nightmare, but also an inconvenience to the customer and a sale killer.

Availability of funds

Credit card processing companies usually process a batch of credit transactions once every 24 hours. The funds are not available immediately after credit card processing. If immediate availability of funds is a major issue for your business, this is an important consideration.

Credit card processor is hardware specific

Some credit card processing companies offer hardware specific solutions. Merchants have to buy POS instruments from the company in order to support the credit card processing solution. The low processing fee is counterbalanced by the amount you shell out for the POS terminals. If the services and rates of the company are good, you can go ahead with the deal, as hardware is reprogrammable and can be sold off later.

Quality of customer service

POS terminals installed by the merchant processing companies should be easy to use. Merchants should not have to call customer care for every issue, and if they do, the response should be fast.

Good service and good processing fees are equally important in a credit card processing company. Cheap credit card processing  does not do the business any good if sales cannot be processed smoothly due to slow processing times, hard to use machines and unhelpful customer service. Verify the credit card processing companies on all counts before partnering with it.

Despite the financial crisis, consumers continue to gravitate towards credit card payments while moving away from cash and checks. Credit card payments not only offer consumers a safe and convenient payment option but it also enables customers to buy products and services without having readily available cash in their wallets to cover the expense. By opening up your small business to credit card payment processing, you are likely to capture this growing consumer trend, resulting in increased revenues and profit streams.

Before making a decision, you must assess your business needs and the potential increase in revenues and profits that credit card processing will bring to your business:

1. What are your current revenues?

Start by calculating the revenues earned from sales over the last quarter or year. This information can be easily obtained from your previous financial records.

2. Get Free Quotes from Credit Card Processing Companies

Request quotes from the top credit card processing companies – setup fees, transaction fees, monthly minimum fees, discount rates, chargeback fees and credit card terminals included in the overall merchant processing offers.

The fees vary based on the type of credit card processing solution required:

      a. brick-and-mortar store/multiple store locations

      b. e-commerce solutions

      c. via mail

      d. via phone

3. Estimate the Potential Increase in Revenues

How many customers did not buy a product because your business does not accept credit cards? Multiply this number, estimated over the last quarter or year, with the average cost of products and the minimum transaction fee to get an indication of the revenue you will gain with credit card payments.

4. Estimate the Impact on Your Profit Streams

Assume your business does not acquire any new customers for an entire month. How will it impact your business if all your existing customers used only credit cards as a payment option?

5. Calculate the Loss from other Payment Options

Businesses that offer customers the payment option of using checks often incur some loss due to fraudulent checks, bounced checks and or late collections etc. Compare the loss and the effort with the value and convenience of credit card payments.

6. Increase Prices to Offset the Convenience of Credit Card Payment Processing

To ensure you maintain your existing profit streams in case of worst case scenarios, bump up the prices of products and services to include the convenience of credit card payments. If you sell items that are expensive, you will most definitely increase the likelihood of additional sales with credit card payments.

Prepare your business for credit card payment processing

Your business is losing valuable dollars by not accepting credit card payments, get started today by comparing credit card processing quotes from merchant processing companies. Once you decide to accept credit card payments, advertise it in your direct mails, newsletters, emails, and banners so customers are aware that they can make a purchase without having readily available cash in their wallets resulting in increased revenues and profit streams for your business.

A business pays a credit card processing fee for each transaction when it accepts credit card payments from customers. This small transaction fee can add up to alot when you consider all the transactions processed at the end of the month. Add the monthly statement fee and any other one-off charges; and you end up feeling it in your bottom line. Though your business is paying for convenience and an incremental revenue stream, there are ways to reduce the credit card processing rates.

Here are a few tips on credit card processing rate reductions to extend your profit margins:

Ensure credit card transactions are processed within 24 hours

Credit card sales transactions should be batched out every day, within 24 hours of the sale. Avid any delays in batching out every day as older transactions incur higher credit card processing fees.

Reduce monthly minimum charge

The contract with the credit card processing companies typically specifies a monthly minimum charge. In the event that your monthly sales falls short of this number, you still pay the difference. If this happens too often, ask the credit card processing company to lower the monthly minimum. Most credit card processing companies will negotiate seeing your past sales records. If they don’t, there are other credit card processing companies that will be more than willing to help you achieve credit card processing rate reductions.

Print your business information on customer receipts

Businesses usually have customers sign the credit card receipts. This provides a proof of sale that your business can keep in case of chargebacks. Ensure the credit card receipts show your business address and contact number, and not the credit card processors. In case of any inquiries, the customer can call you to verify the purchase. If they call the credit card processing company, your business will be charged for the information retrieval.

Ask for a credit card merchant rate reduction

You aren’t doing any favors by extending credit to customers. Each time a customer uses a credit card, the credit card company makes money of you. By accepting credit card payments, you are in fact generating more business for the credit card company. Ask for credit card merchant rate reduction in exchange for the credit card sales volumes.

Avoid card less transactions at the store

If your business location has a card swipe machine, avoid card less transactions. The credit card processing fees are higher for riskier transactions. Manually keying in credit card information is considered riskier than a card swipe. Swiping credit cards through the processing slots incurs the lowest fees. If the magnetic strip of a credit card is damaged, ask the customer for an alternate credit card. Most customers carry multiple credit cards. If not, you have no choice but to type in the information but keep this practice to a minimum.

Review monthly statements carefully

If you have had a long relationship with the credit card processor, there is likelihood that they may have hiked credit card processing rates overtime. You can only know this by reviewing your monthly statements carefully. Ask questions about downgraded transactions and unexplained fees. If there are too many of these, consider shopping around for a credit card processing rate reduction.

They key to getting the most out of your credit card processing service is to stay on top of it at all times. Know the current credit card processing rates and always negotiate with your credit card processing company before you sign up for a merchant account. Monitor the major credit cards used by your customers as that can influence the credit card processing rates. And, always shop for credit card processing rates by negotiating with credit card processing companies to get the best deal for your business needs, credit card sales volumes, and type of transactions.