Charles Baratta, The Merchant Service Group Blog

Did you know that utilizing a merchant account is likely to increase both business traffic and your average ticket sale? According to several studies, consumers are likely to disassociate any “pain” felt from relinquishing their money in a purchase if the transaction is conducted using a credit card. As odd as that may seem, it’s true. Without getting into the psychology of it, using a credit card tends to lead to more spending and more spending leads to more business. That makes having a merchant account essential for your business’ success.

It’s also becoming increasingly difficult to conduct financial transactions in this day and age without using a credit card. Although cash remains king in this economy, credit and debit cards are the most common means of payment. If your business has woken up to the reality that you need to embrace plastic, There are a few things you ought to know.

The first thing you’ll need to do in order to start accepting credit card payments is to set up a merchant account. This usually requires that you submit to a credit check (although it’s not always necessary) so that the provider can be sure they will be paid (I’ll get to that in a moment). Merchant account providers may also request legal documentation to confirm that you are a valid business entity. These are certainly reasonable requests but they also give an indication that the provider is doing their diligence in setting up your account.

Before you settle on a merchant account vendor, make sure you do your research on exactly how much their services will cost you. Providers can charge a handful of fees as part of their services. Some of these are charged once but most are recurring. Most vendors will charge a one-time application or setup fee. (Watch out for those who may try to charge you both!)

When it comes to processing the transactions, expect to pay two different fees. The first fee, typically called the discount rate, is a flat percentage of the transaction sale. The second fee is usually based on the number of transactions you process on a monthly basis. This is called the transaction fee and is typically a flat fee.

Other fees you may encounter include statement and minimum monthly fees. The statement fee covers the cost of providing you a detailed list of every transaction during the month while the minimum monthly fee charges you if you don’t process a minimum number of transactions. As a business trying to minimize costs, it is always in your best interest to shop diligently and choose a merchant account provider with the lowest fees or no fees at all.

Once you’ve decided on a service provider for processing your customer’s credit cards, you’ll probably want to make sure you have all the proper equipment and software in place. Card terminals, pin pads and check readers will help allow the transactions to process smoothly and efficiently. Having the proper software installed on your business’ PC’s will also allow you to finalize, print and batch your transactions. And of course, these items should be a part of the contract you set up with your merchant account provider.

Let Merchant Service Group help you expand your business by accepting credit cards and other electronic payments. Visit us at BusinessCreditCardProcessing.com.

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