Having a merchant account can provide an expanded customer
base for small business owners. A merchant account allows business owners to accept credit cards. For small business owners who operate websites for the businesses, a merchant account is almost a necessity to ensure customer activity. Small business owners can set up a merchant account with their bank in only a few steps. Once the account is set up, the small business owner has a few more steps to complete in order to be able to use the account and ensure that all customer transactions are safe.
Step 1: Select the credit cards that you will accept with
your merchant account. Bear in mind that the credit card company takes a
percentage of each transaction, so read the fine print carefully before
agreeing to accept a type of credit card. Some merchants choose to accept only
the types of credit cards that patrons use most often (i.e., Visa and
MasterCard) to avoid excess fees from cards used less frequently.
Step 2: Purchase access to payment processing software that
links the completed transactions to your bank account, via your merchant
account. Companies such as VeriSign, Monetra, and VeriFone offer payment
Step 3: Authorize the credit card purchases with each
transaction. Authorizing payments protects you, the merchant, from accepting
credit card purchases from bad credit card accounts. Your merchant account provider should be able to include an authorization service to your account. If you prefer to look elsewhere, Authorize.net
provides a subscription-based credit card authorization service.
Step 4: Batch the daily transactions with your payment
processing software. Batching simply collects the transactions from each type of credit card and sends them to the bank in a group, instead of one by one. Be sure to send the information to the bank at the close of business day to ensure that payment turnaround is as fast as possible.
Step 5: Receive payments from the credit card company. The
payment you receive is the amount of the original transaction, minus any
transactional fees that are applied. Expect the turnaround from accepting the credit card during the transaction to receiving payment for the transaction to be about three days.
Tips and Warnings:
If your business will be entirely online, the software and
equipment will be built into any payment processing service that you use. If
you operate out of a brick-and-mortar location as well, however, you will need the equipment and software to accept credit card payments. Check suppliers such as PaynetSystems.com, MerchantExpress.com or MerchantWarehouse.com to search for the items you need.
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