 Accept Credit Cards for Increased Profits
~Part 1~
by
Flora Morris Brown, Ph.D
When I began my business in the 90’s I didn’t have a website nor merchant account. Of course I didn’t have any customers either.
My first customers would order their gift baskets, I would ship their orders and wait for them to send me a check. Scary, isn’t it? I shudder to think how trusting and naïve I was. But fortunately, I learned from researching and networking that accepting credit cards is not only a good idea, but it’s critical to running a successful business and increasing profits on and off line.
There are several reasons you should set up a merchant account and accept credit cards.
- It enables you to accept a wide variety of payments and thus get your money up front.
- It provides ease and convenience for online customers who will return to your website when you’ve made it easy for them to buy.
- It enables you to keep track of online and offline transactions using the monthly statements.
There are three ways to set up a merchant account and credit card processing.
1. Get a merchant account from the bank or credit union where you already have a personal account. These institutions are very conservative, however, and may decline to work with a small business.
If your bank does agree to work with you, examine the terms carefully. Some banks charge a monthly fee whether you have any sales or not. Even if you don’t get a merchant account through your bank, you will still need to designate a business or DBA account for depositing the proceeds from your business.
2. Work with a broker or independent merchant provider who will serve as an intermediary. This person or company may convince a bank to work with you, or set you up a merchant account service that processes credit cards. There is usually an application fee and you will be charged a percent of your sales as a processing fee. The benefit of this intermediary, however, is they can usually get you a better fee than you may get directly.
This and the first method require a waiting period for approval. Some will even want a copy of your brochure so they can verify what products you’re selling.
The independent provider who set me up was Mosley Bankcard Service who specializes in working with homebased businesses and can help you no matter where you are in the country.
3. Use a third party processor, such as PayPal, Click Bank or ProPay. This is the quickest way to begin accepting credit cards since approval only takes a few minutes and they don’t check your credit. But do your research first since some charge a hefty setup fee and a high percentage for transactions, while others may not. Also, you want to investigate whether payments can go directly into your checking account and be immediately available to you or must you wait for your money.
Go to Part 2
About the Author
Flora Morris Brown, Ph.D. is a Professor Emeritus at Fullerton College, educational consultant, gift basket expert, writer and professional motivational speaker. From her websites, blogs and newsletters she motivates small business owners and gift retailers with sales-generating ideas, marketing tips, design ideas and business success strategies. She is mother of four and grandmother of three. When she's not traveling she enjoys her home in Anaheim, CA.
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