Aboriginal Buying Group

Like every other business decision, hiring a credit card processing service also calls for price considerations. The expenses include the rates applied by the credit card processor and the expense of equipment needed to carry out the credit card processing. It is wise to be aware of all the costs so that you can make the correct choice of a card processor.

Credit card processing equipment

Businesses need credit card terminals for processing payments. They are used for swiping cards at checkout. This equipment is not cheap and requires some initial investment. However, they can look at various options in the market. The cost can be anywhere from $150 to $1000 depending on its sophistication. Give a thought to your requirements and budget to choose the model that meets your business needs. Financing options are available if you want to purchase the equipment or you may choose to take one on lease, try it out and then finalize a purchase if it is appropriate. Some machines can be rented at a low rate of $20 a month.

Often, terminals are included in the package accompanying a new merchant account. This proves more economical than buying the equipment independently. You can also use a software solutions to accept credit card payments through the internet and verify transactions with virtual terminal software. Another option used by businesses is to process the payment manually and authenticate the information over the phone with the client. However, this is time consuming and riskier as the buyer may not have enough funds available when the transaction is processed though they may have been available at the point of verification.

Credit card processing fees

Another important cost for a company is the discount rate imposed by the card processing company. It is the percentage charged for each transaction. This fee depends on the risk the vendor believes it is taking by offering service to the business and the chance of losing money on processed payments. Fees is based on a few other factors such as credit history of the business, number of credit transaction and the amount of credit card sales likely every month. In addition, charges are different for transactions where the card is not present such as online payments or payments on the phone, and where the card is available for physical verification. Most vendors charge a additional fee besides the discount fee of 2.2 % to 3% for transactions where the card is not present. Fee for deals where the card can be verified physically is lower, in the range of 1.5% to 2%.

The discount fee is just the start. There are a number of other fees that businesses have to pay to take advantage of the credit card processing services. These include application fees, activation fees, setup fees, customer support charges and programming expenses. You may or may not be charged all these fees and some of them could even be refunded if you do not switch providers for a set period.

It is important to understand all the related costs and fees associated with credit card processing. Do sufficient research and get referrals from business partners. Do not get misled by low fees or charges. Good customer service is also necessary. If you face problems when the customer is at the counter, you will need to quickly reach customer service or you will lose the sale.

The process of getting a merchant account can be intimidating to the new business owner.  But it doesn’t have to be.  Nevertheless you must pay attention to several factors when you are searching for the best credit card processing services provider for your needs.

1.     What do you need? Some merchants need much more than others.  If all you need is the ability to process credit and debit cards, there is no need to pay for check processing, for example.  Are most of your customers paying with cash?  Perhaps they go online and order there; write down what you need so you only get those services.

2.     Buy or lease? If you have a small, new storefront, you probably don’t want to buy your credit card terminals right off the bat.  After all, the economy is uncertain and you don’t want to be stuck with equipment you no longer need if things don’t work out.  On the other hand, if you are stocking several locations, buying is much cheaper in the long run.

3.     How much business will you do and what kind?  Comparing prices between merchant accounts can seem like looking at apples and oranges, unless you know how to read the numbers.  For example, if company A offers a discount rate of 1.5% and a transaction fee of 25 cents, and company B has a discount rate of 2.5% but only charges 5 cent per transaction, which makes the most sense?

It really depends.  If you have a few, high priced transactions, say you process 10 sales of $50 each, the total cost with company A is ((50 x 0.015) + 0.25) = $1 per transaction - $10 for the day.  With company B it will be ((50 x 0.025) + 0.05) = $1.30 per transaction - $13 for the day.  It seems like a clear choice.

However, at 50 sales of $10 each, things are very different. 

Company A ((10 x 0.015) + 0.25) = 0.40 per transaction for a total of $20 for the day, and company B ((10 x 0.025) + 0.5) = 0.30 per transaction, resulting in a bill of $15 each day. 

You see, how you sell and how many transactions you process will affect which is the best deal for your company.

In the final equation, you should find an online merchant account that meets your needs and your anticipated habits – it makes business much more pleasant for all.

If your business takes you on the road often, you probably want to have the ability to engage in mobile merchant credit card processing.  This service, which allows you to process credit card sales regardless of where you are, offers you great convenience as well as the assurance that you won’t miss any sales.  There are some concerns that you should address when picking such a provider.

Signal Availability

For your mobile processing to be a viable part of your business, you need to have good signal strength wherever you go.  If you are in areas that don’t get service, you will need to check to make sure your transactions will be saved up and then transmitted when service is available. 

Fee Structures

It is to be expected that you will have the usual fees associated with any online merchant accounts contract, but mobile services frequently include some additional expenses.  Swiped transactions usually cost less than those that need to be entered manually, and texting fees or connection fees are common as well.  Make sure to ask about all fees, hidden and revealed, before you sign on.

Chargeback Fees

As in any credit card processing service, when a refund or chargeback is issued, you will be expected to pay fees as the interchange fees will be all yours to cover.  This is true when a customer disputes any charges as well.

Security Concerns

Mobile transactions are potentially more susceptible to hacking than computer based transactions.  Make sure to ask about SSL encryption, variable frequencies, and other security features that will help keep your customers’ information safe.

Printing Receipts

While there are some mobile terminals that offer immediate printers, most don’t.  In any case, these printers are usually quite expensive and not really worth the investment unless you plan to use it consistently.  In place of printed receipts, most mobile terminals send an e-mail receipt to the customer immediately, potentially increasing your costs a bit.

Even with the additional inconveniences, mobile merchant account credit card processing for a business that is often on the road can be very useful.