Accepting Credit Cards

By admin on September 22nd, 2011

Three Steps to Accepting Credit Cards in its Simplest Form

If you are just starting your own shop then you may be looking at how you can accept credit cards. Being able to accept card payments is important for your business however there is a lot of leg work before you are able to do so. Without going into too much detail the following are the three essential steps to being able to accept card payments. So here goes....
Step 1) Set up a Merchant Account
Before you can do anything you need a merchant account. There are 9 banks in the UK that offer merchant accounts. These banks are known as acquiring banks and they will request a lot of information before from you in order to scope the type of business you are operating in so that they can determine the payment you will have to pay for each transaction. Some of the information they may require includes:

a your business history and performance
a business accounts
a your forecast turnover
a expected average transaction values and volumes on credit and debit cards
a transaction frequencies
a the type of goods you sell
a the proportion of transactions you expect to receive face to face, by phone, mail order, or online
a your suppliers' details
a how you deliver your goods or services

It can take anything from one week to four weeks to open a merchant account. For start-up business it can take even longer as the banks may require even more information, however rest assured that it is well worth doing all this in the long run

Accepting Credit Cards

Step 2) Set up your card processing equipment
Once the merchant account has been accepted you are then free to get your card processing equipment. Normally your acquiring bank will provide you with one on a rental basis. All you need to consider is whether you want a small PDQ machine or a fully integrated till system.

Step 3) Connect Your Terminal
Once you have your credit card terminal you then have to connect it up. This is probably the most simply of the three steps as all you have to do it connect it to a telephone line. This can be an existing phone line however it is recommended that you get a dedicated line for it in order to avoid interruptions. Once it is connected you are up and running!

Voila that is the three steps to accepting credit card payments in its most simple form. There are plenty of resources on the web that can help you alternatively it is always worth checking with your existing back first as they can sometimes provide the best deals.

Accepting Credit Cards

About the author: Dan Ashcroft has worked in the merchant services sector for the past 15 years. For more information visit http://www.seymourdirect.co.uk

Source: http://www.articlesbase.com/finance-articles/three-steps-to-accepting-credit-cards-in-its-simplest-form-923535.html

Frequently Asked Questions

QUESTION:
What is a good way of Accepting Credit Cards for a small internet based business?
I have a small home business and want to start accepting credit cards. My customers pay mostly online, but I have a few who prefer to give me the information over the telephone. Presently, I use PayPal, but more and more of my customers do not want to use PayPal.

My budget is small and I do not make a large profit on the items I sell.
Any suggestions would be greatly appreciated.
- ANSWER:
  Try Google checkout or Reg.Net
QUESTION:
Do companies pay a fee for accepting credit cards?
I work for a dentist who is going to get a machine to start accepting credit cards. How does that work? Will he have to pay a monthly fee for the machine? Or does he pay per transaction?
- ANSWER:
QUESTION:
What's involved in accepting Credit Cards for others?
What are the tax and legal implications of accepting payments on behalf of someone else? Say I built a software product to help someone manage their service and it also allowed them the ability to process credit cards (with my merchant account) through that software...Do people do this? Clearly ebay does it by the very nature of Paypal. How does this work? How can one build a competing business model?
- ANSWER:
  Just taking credit cards on your account on behalf of another person is a huge "No-No" with the card associations. They will immediately shut down your company's merchant account, and many will put you on the "TMF" list--Also known as Visa's Black list. If you get on this, you will never be able to get another merchant account.
  
  HOWEVER--you do have 2 good options for this. If you want to go down the PayPal route, you can. PayPal is something called an IPSP in industry terms. This is a special registration with the card associations (Visa/Mastercard). To say that it is a major undertaking is a bit of an understatement. You need to go through a series of PCI audits (onsite inspections, security tests, etc). You will also need to find a sponsor bank that will underwrite your IPSP account. They will require a significant cash on hand requirement on your behalf to offset chargeback losses. You can get some of the IPSP regulations here:
  
  http://usa.visa.com/merchants/operations/op_regulations.html
  
  Realistically, you will need about 1.4 million USD to get a cheap solution to market, and about 4-6 million to get a decent solution to market.
  
  Most software developers do not go down that route. Many partner with existing merchant account providers that offer discounted merchant accounts to the partner's customers and some type of payment gateway for processing the cards. The software developer then receives a percentage of the profitability of the customers that they refer to the merchant account provider company.
  For instance Quickbooks/Intuit uses Innovative Merchant Services. A good site for software companies or web developers looking to integrate payment processing into their offering is http://www.r3sellers.com
QUESTION:
I have a home based alterations shop. Would accepting credit cards improve my business & what company to use?
I have a home based alterations and window treatment shop. Since I need to attract more customers, would accepting credit cards increase my clientele? Also, what credit card company should I use with the least fees and no set up fees?
Thank you,
- ANSWER:
  mastercard and visa are the least expensive to take from a business standpoint
  
  Amex and Discover charge pretty crazy fees
  
  you would have to contact them for the specifics tho. i just worked at a place and found out that was why we didnt take Amex or Discover, they wanted way too much in fees from us
QUESTION:
What are cheaper and reliable options to paypal in accepting credit cards?
I want to accept credit cards for work I do but I do not want to pay paypal excessive fees. What are cheap and other alternatives that offer everything paypal does?
- ANSWER:
  You can get a merchant account through the bank you do business with.
  
  Hate to tell you this, but PayPal's fees are NOT exorbitant. You'll pay 2.5% or higher with a brick-and-mortar merchant account too. Even higher if you accept AMEX...