Credit Card Processing

Evaluating Credit Card Processing Companies
By Debbie Dragon

There are numerous credit card processing companies to choose
from, each offering different features and fees. Choosing a
company to process your customer's credit card payments can be
a daunting task, and sometimes you'll experience difficulties
both looking for a merchant account provider and then
afterwards- if you make the wrong selection!

Many banks will deny small business applications for merchant
accounts because they don't want to take the risk. Most small
businesses end up going through third party providers who
actually get the merchant account on your behalf; then apply
their own rate structure to your transactions.

If you operate an online business, you'll need a shopping cart
program of some kind- which must work with the system you use
to process credit cards online. Unfortunately, if you go with
a third party shopping cart rather than a custom written one it
may not work with all credit card processing gateways. You
really need to be sure that whatever shopping cart program you
use on your web site works with the merchant account you
ultimately end up using to process customer payments.

Accepting credit cards is not free! You pay the third party
merchant account provider (or the bank if you are able to
secure your own account directly with a bank that provides it)
will charge you fees in exchange for the ability to accept
credit card payments. The fees and rates you pay will vary
depending on many factors, including how long you've been in
business, the type of business you operate, your credit score,
how much of your sales are processed by phone versus online,
and the amount of credit card sales you process each month.

Some providers charge an annual fee in addition to a fee per
transaction, while other providers only charge a percentage of
each transaction processed. Typical rates for small businesses
accepting phone and mail order payments are $0.10 to $0.30 plus
2 to 3% of the transaction amount. If the merchant account
providers you are looking at want to charge over this
percentage, be sure to check out a few others to see if you can
get a lower rate before signing up. Sometimes, your credit
rating will result in your having to pay higher fees- but it's
worth shopping around a little to see if you can get a lower
percentage rate per transaction.

When you're shopping companies looking for the best merchant
account provider, make sure to compare all of the fees to see
how much you're going to end up spending per each sale. You
should also take into consideration what the application fee is
(if any), how much you pay annually, how much you must spend on
equipment needed to set up your account, and whether or not you
must maintain a monthly minimum of sales volume.

Also compare how each merchant account provider allows you to
withdraw your money- can you do it whenever you want or do you
have to do it at specific times of the month or year? How long
will it take to receive your funds once you've requested a
withdrawal or transfer of the money? How does the provider
handle charge backs?

Always read all of the forms and contracts associated with
merchant accounts before you sign anything. Understand the
terms for cancellation and what conditions the provider can
cancel your account, as well.

The process for applying for a merchant account varies
depending on the company, but you may be asked to provide a
photo of your office (even if it's in your home) to verify you
are in the location you say that you are. Some companies will
want to send a representative to photograph your place of
business. Occasionally, you'll be asked to provide a DBA or
business license, your tax returns and profit and loss
statements.

About the Author: This article has been provided courtesy of
Creditor Web, http://www.creditorweb.com .

Source: http://www.isnare.com