There are many credit card processing companies to choose from, and each has its own fees and features. Choosing a company to handle your customers' credit card payments can be hard, and if you make the wrong choice, you may have trouble both when you're looking for a merchant account provider and after you've chosen one.
Many banks won't give merchant accounts to small businesses because they don't want to take the risk. Most small businesses end up using third-party providers, who get the merchant account for them and charge their own rates for their transactions.
If you run an online business, you'll need some kind of shopping cart programme that works with the way you take credit cards online. If you use a shopping cart from a third party instead of one you wrote yourself, it may not work with all credit card processing gateways. You should really make sure that the shopping cart programme you use on your website works with the merchant account you will use to take payments from customers.
It costs money to accept credit cards. You pay the third-party merchant account provider (or the bank, if you can get your own account directly from a bank that offers it) fees in exchange for being able to accept credit card payments. The fees and rates you pay will depend on many things, like how long you've been in business, what kind of business you run, your credit score, how many of your sales are done over the phone versus online, and how many credit card sales you process each month.
Some providers charge a fee per transaction and an annual fee. Other providers only charge a percentage of each transaction they process. Small businesses that take phone and mail-order payments usually charge between $0.10 and $0.30 plus 2% to 3% of the transaction amount. If the merchant account providers you're looking at want to charge more than this percentage, check out a few others to see if you can get a lower rate before you sign up. Sometimes, your credit score will mean you have to pay higher fees, but it's worth looking around to see if you can get a lower percentage rate per transaction.
When you're looking for the best merchant account provider, make sure to compare all of the fees to see how much you'll end up spending on each sale. You should also think about the application fee (if there is one), how much you pay yearly, how much you have to spend on equipment to set up your account, and whether or not you have to make a certain amount of sales every month to keep your account open.
Also compare how each merchant account provider lets you withdraw your money. Can you do it whenever you want, or do you have to do it at certain times of the month or year? How long will it take for you to get your money after you ask for a withdrawal or transfer? How does the service provider deal with charge backs?
Before you sign anything for a merchant account, you should always read all the forms and contracts. Find out how to cancel your account and under what circumstances the service provider can do it.
Getting a merchant account is different for each company, but you may be asked to send a picture of your office, even if it's in your home, to prove you are where you say you are. Some companies will want to send someone to your place of business to take pictures. You might be asked to show a DBA or business licence, as well as your tax returns and profit and loss statements.
