Accepting Credit Cards For New Businesses

If you are starting an online business you must accept credit cards for payment. You simply have no chance of surviving in business if you don't.

Businesses which are new and small and have sales under $750. each month, can probably get away with a Pay Pal type account to get started. But once your business grows to over $750 per month it will most likely save you a lot of money and aggravation to get your own merchant account.

For those who you who have recently started an online business and who are new to the world of electronic payment processing, it can certainly be confusing.

Here are a few tips:

Take note of the fact that almost all merchant accounts have a monthly minimum. That means you have to produce a certain amount in monthly fees otherwise the bank charges you the difference. Usually the monthly minimum is $25 with most credit card processors.

So what this means to you is...if you only expect to do only $200 to $300. in monthly credit card sales, it will not make sense to do your own credit card merchant account because of your responsibility to pay the monthly minimum. In this instance you will save money by using a company like Pay Pal. But as your sales approach and exceed $1000. monthly it will be less expensive to have your own credit card merchant account because when you have your own account, the rates are usually much lower.

Another issue to look at initially is whether you have the ability to actually swipe the customers card through a credit card terminal. The rate for swiped transactions are much lower than keyed in or online rates. The term keyed in simply means that you are not swiping the card. So when you are looking at rates online don't look at the lowest rate that is advertised because that will always be a so-called retail rate which means you would have to swipe the card through a credit card terminal in order to get that rate.

Online merchants should also find out if the credit card processor provides a secured gateway as part of the package. You will save money if the card processor provides this service ,otherwise you will need to use an outside service. An outside service will charge setup fees and usually an ongoing monthly fee as well. The best bet is usually to find a processor that can provide one stop shopping for online merchants.
Remember it is always wise when shopping to look beyond the come on rate. The devil is always in the details, so read the fine print.

Chuck Irving is an internet marketing consultant. http://www.creditcardemerchant.com