How to get a credit card merchant account
Did you know that more than 85% of purchases made online are paid for with credit cards? Or that sales can increase up to four times when credit cards are accepted? If your business still insists on the old check, or worse, cash, you might as well put it up as a museum display! Acquiring a credit card merchant account is one of the first things businesses must do if they hope to compete.
If you’ve never heard of a credit card merchant account or have no idea how to get one, don’t worry. It involves a fairly simple procedure and there are a number of service providers who will be happy to hire you.
Objective, first things first. Arm yourself with a little knowledge of how credit card processing works so you can sound smart when you start discussions. Basically, the key players are the credit card companies like Visa or MasterCard; the banks, which are linked to these companies to issue credit cards to their customers; and clearinghouses, which actually process and verify transactions. Then there are merchant account providers, or independent sales organizations, whose goal is to ensure that your business has a merchant credit card account. These are the guys you’ll be talking to, so make sure you pick a reputable provider. Some providers like Merchant Accounts Express offer a price protection guarantee to safeguard the interests of the credit card merchant account holder.
Right! Now that we’ve got that figured out, let’s discuss what infrastructure you need to operate a credit card merchant account. Well, the most important thing is to establish a gateway, which is a means of communication with the clearinghouse. One of the ways is to use a magnetic card machine, the kind you see in every retail establishment. The credit card is swiped into the machine, which transmits information to the clearinghouse. Once the transaction is authorized, a charge slip is produced. The cardholder signs a copy and gives it to the credit card merchant account holder.
If your business relies heavily on e-commerce, then obviously the swipe machine is not for you. One option is to install a type of software on your computer that will facilitate the exchange of information between your credit card merchant account and the clearinghouse. However, this requires manual entry of the customer’s card details, transaction value, etc., so you will need to take into account the additional time and effort and also the possibility of a credit entry error. data.
Still not happy? No problem. Most e-commerce websites use a real-time payment gateway, such as PayPal, which completes the validation and data transfer process while the buyer is online. The credit card merchant account holder does not need to be bothered by any manual process. The only precaution that should be taken is to ensure the compatibility of the gateway with the rest of the software and systems that are part of the e-commerce process (eg shopping cart software).
That’s pretty much all you need to know about a credit card merchant account. Plus, of course, once it’s set up, it will help propel your sales skyward!