How to Set up your Business to Accept Credit Card Payments

| January 11, 2013

Not a day goes by in today’s world of commerce that the significance of cash and checks becomes more and more suspect.  Security issues surround cash in any venue, and covering and running after bounced-check scams can be a total waste of time.  Cash and checks are not “zero” cost, nor is the issuing in-store credit to encourage the final sale of your goods to a willing consumer.  If one is to succeed in business in today’s modern world of electronic convenience, a store owner, whether direct retail or Web-based, must accept credit and debit card payments.
The numbers can also be terribly convincing.  Nearly two-thirds of all “brick-and-mortar” sales transactions are closed by accepting plastic payment cards.  Online websites may have a few more alternatives, many based on credit card deposits in proprietary “wallets,” but the share there approaches 90 percent.  These trends are also continuing quite rapidly in a northerly direction, and with smart phones proliferating in the market, newer payment technologies will soon replace older innovations in time.

As “commoditized” as the payment industry seems to be, it can be disconcerting to realize that it is really a speeding “train” that has already left the station.  Small businesses may be more focused on sales and marketing, along with the logistics of production, but payment operations are the final “cog in the wheel” that produces the desired cash in the till.  It makes total sense then that every merchant needs to be on the “payments train”, sooner rather than later.

How does one get started?  There are many websites that will guide you through the process that begins when you open a “Merchant Account.”  Your decision steps will follow a logical course, like any other challenge that you might face.  First, you have a homework assignment.  Read as much as you can on the web to get familiar with the terminology and with what may be expected from you in the way of defining your business model and how and when you may want to collect payments.

The second step involves searching for an appropriate credit card processing business partner.  There are hundreds of them out there, mostly banks or agents of banks, but all can only “connect” to the card associations through what is known as an “Acquiring Bank.”  This bank is the one that will stand behind your payments, so safety and soundness are keys in this regard.  Depending on your budget, you can get someone to help in this search for a fee or you can go through many internet websites that are specifically designed for this search purpose, for example here.  Each path will deliver a host of options for you to review in the next step.

All that is left now is to evaluate each alternative, based on some common criteria for comparison.  Many websites perform these reviews for you, but your processors will provide you with a detailed proposal that defines their fees and charges, after they have had a discussion with you about how your business operates.  Are you “brick-and-mortar” only?  Do you need a payment gateway and transactional website for the Internet?  Will a “wireless” solution work best for you because your business is always on the go, dealing with customers from remote locations?

Once “due diligence” is concluded and a decision is made, the “fun” will start.  Although the process may appear overly complex, processing firms are very efficient when setting up new clients.  Once on the “train,” you will begin immediately to enjoy the benefits of electronic payments and be better prepared when major innovations come down the track.


Category: Internet News

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