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IT’S DEFINITELY A CREDIT CARD WORLD
Are you shopping around for a credit card processor and are opening a new business and are looking to take credit cards and have questions?? This information is for you and hopefully it helps you in making a decision to accept or not accept credit cards or not. This info will also help you make a decision which provider to use. If you don’t see the info you need, you can email us at lenny@merchantservicesprovider.com or call 800-430-9566. GOOD LUCK.
It's amazing how many people are using credit cards now days. Debit Cards. Visa. MasterCard. Amex. Discover. And it's only growing each day. Not too many people walk around with cash anymore. Online purchases and so on. Who would have thought it would be like this. Most businesses can't survive without taking credit cards. And the businesses that aren't, are missing out on profits from impulse buying and from all the consumers that don’t carry cash anymore. Even the federal government is paying by credit cards.
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ACCEPTING CREDIT CARDS FOR YOUR BUSINESS
Accepting credit cards increases impulse buying. And if you are not taking credit cards, your competition definitely is and it gets invoices paid a whole lot quicker. When you accept credit cards, funding is put directly into your checking account within 24 to 48 hours, so you are not waiting long. And if you are selling products online, accepting credit cards is an absolute must.
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CAN I ACCEPT CREDIT CARDS OVER THE INTERNET WITHOUT SETTING UP A MERCHANT ACCOUNT?
Sure. PayPal and other 3rd party merchants can set you up. But rates are higher then a regular merchant account.
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TYPES OF CREDIT CARD PROCESSORS
There are many types of companies that can handle your credit card processing needs. Most banks are able to handle your credit card processing, but in most cases do not process the transactions themselves. Also, don’t think that when you deal with a bank that your rates will be cheaper. Most banks deal with an ISO. (Independent Sales Operator)
In most cases, dealing with an ISO can get you better rates.
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NEGOTIATING YOUR RATES
If you ask a provider to give you a lower rate in one area, it's very possible you will be paying higher in another area so they can make up the difference. It can be very confusing. Look out for additional fees, such as batch fees, annual fees and AP fees, when fees are lowered in other areas.
When you are leasing equipment, you may be offered a low rate, so when negotiating fees and charges, make sure it's not being made up in another area.
There are many different languages out there on applications, so please read them. Get copies of everything. Even the ones you don't sign.
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RATES AND FEES
If you are swiping customers cards in person, you are considered retail and your card swipe ratio has to be greater then 50%. In this category there will be a qualified rate, a mid qualified and a non qualified rate. Qualified rates are for your everyday Visa and MasterCard, and some rewards cards offered from V/MC. Mid qual is for key entering; some rewards cards and some corporate cards. Nonqualified is for some corporate, some rewards and out of the U.S.A. credit cards. You will also get charged the non qualified rate if you don't batch out at night or before you close your business for the day. In this category you will get your money next day up to longer depending on the provider you use.
A Moto account is considered a phone order, internet or even a key entry type business. You must be doing 50% or more to be put in this category. There is a qualified rate and a non qualified rate. Qualified is key entry, corporate and rewards cards. Nonqualified is some corporate and out of the U.S.A. cards. Also in this category if you don't batch out for the day you will be charged nonqualified for the whole day. There are also transaction fees and a statement fee in all categories. Some providers also charge batch fees, annual fees, monthly minimums, etc. Your provider may not tell you every charge, so it will be up to you to read all the details. There are many different languages out there on applications, so please read them. Get copies of everything. Even the ones you don't sign.
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AMEX AND DISCOVER
Your provider can set these up for you, and they have no control over the rates. Or you can deal direct and give the merchant number to your provider to add. Be wary of monthly statement fees from these 2 companies
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TERMS, CONTRACTS AND CANCELLATION FEES
There are providers that do not require a cancellation fee, but most do, and can be as high as $1500.00. It's ok to be in contract, because that is required by the processor, but beware of cancellation fees.
Most leases require a 48 month commitment and are almost impossible to terminate.
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MERCHANT ACCOUNT QUALIFICATIONS
Before getting approved for a merchant account, you will, need to fill out an application; It should be only a page or two along with a couple signatures. The processor checks your credit, some questions need to be answered in regards to the type of business you have. Having a home based business does not mean you should pay more in fees. In most cases a merchant number is given to you within 24 to 48 hours after approval. If you currently have a merchant account, it's the same approval process.
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EQUIPMENT
Terminals and POS systems
If you are swiping the customer's card, then you will need a terminal with a printer. Prices can vary from 250.00 up to 1000.00 for a wireless machine. You can lease, but remember you will be locked in for 48 months for about 25.00 per month. If you are an online business, then you will need a merchant account and a gateway for real time processing which means you get an approval code for each transaction, via the internet. This is needed especially if you are shipping same or next day. Gateway costs can be roughly $15.00 dollars monthly and there could also be additional charges. Normally, no contract is required for a gateway.
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WHAT COMPANY TO DEAL WITH
Feel comfortable with whom you are dealing with. Is the co. available to you when you call to ask a question and how long before that question or issue gets answered. Rates are a factor. Be sure to read your agreement and check all your rates. Qualified rates, mid qualified and nonqualified. Get recommendation letters. See how long it takes to put the money into your checking account. See how much your cancellation fee is, if any. Local representation is sometimes a good thing.
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Q & A
800-430-9566
lenny@merchantservicesprovider.com
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