Setting up Shop with a Merchant Service Provider
If you have thought about accepting credit cards from your customers but have no idea where to start, take a breath and relax. This article will give you some basic information about finding a merchant service provider and some information on how the process works. Most business owners find that when they begin accepting credit cards their customer base opens up and they extend their reach into the market. With over 25 million credit card transactions happening every day, that is certainly a customer base you would like to tap into.
Starting at basics, you may be wondering what a merchant service provider even is. Merchant services are simply accounts and services offered to merchants, or business owners who wish to accept credit cards. It is mandatory that you have a merchant service provider as they are the only way to get a merchant account, which is what you need in order to accept credit. It is possible to go through a bank for a merchant account, but most banks will not accept small businesses as viable credit risks, so you will likely need to go to another party. Luckily there are tons of them out there with all types of accounts available.
As mentioned above, you will need a merchant account in order to accept credit. A merchant account is a special bank account that only handles credit card or debit transactions. In order to get this account, there will be a contract or agreement between the small business and the merchant service provider that will set the rules, fees and structure of the account. Some of them offer bundles as well, bulking everything you need into one fee structure.
Your merchant service provider will charge fees and there is really no way around some of them. There are account fees like a monthly fee, discount rate and transaction rate that are usually mandatory and a scattering of other fees you may be subject to. Some of these fees, like the discount rate and transaction rate are totally based on the amount your customer purchases and the fact that a transaction happened. For an idea of the average rates, when added together, if a person charges $100 at your store, you will owe the merchant service provider, anywhere from $2 - $3. Though they are not extremely large fees, they can add up if you sell a lot of low priced merchandise.
When you are ready to jump into applying for a merchant account with a merchant service provider, make sure you fully understand all of the hidden fees and costs as well as what is in the contract. If you are able to, sit down with a representative of the company and as them any questions you may have. If this is not possible, try to speak on the phone. If you are not able to meet with them in person or talk to them via telephone, you should probably not consider this particular merchant service provider. They should have these services available for you at all times.
