Merchant Credit Card Processing Services: Stop Losing Money to Competitors

Henry Ford once said, “The competitor to be feared is one who never bothers about you at all, but goes on making his own business better all the time.” Of course, Ford was revolutionizing the automobile industry and perfecting the assembly line process long before credit cards came on the scene. But if he were here today, there’s no doubt he’d be accepting credit cards as payment for his famous Model As.

OK, so that analogy is a little dated. But one thing is certain: entrepreneurs and free-thinking businessmen like Henry Ford didn’t get to the top of their fields by adopting a “wait-and-see” attitude. Ford and those like him were always on the lookout for ways to improve and innovate, to move ahead of the competition and take their businesses to the next level.

Credit cards are one tool in a vast toolbox of business options that can help keep you competitive. And chances are, it’s a tool that at least some of your competitors are already using to chip away at your customer base and drain away your profits.

If you read business news and reports and stay involved in your own industry, you’re probably familiar with many of the stories about how credit cards can help you achieve higher profits and grow your customer base. And if all the news and statistics haven’t been enough to convince you to take the plunge, it may be that you’re still a little skeptical of the processes involved in accepting credit cards, or believe the costs will be prohibitive.

So let’s look at these issues one at a time. First of all, if you priced merchant accounts a few years ago, be aware that rates have changed in recent years. That is to say, the fees and costs associated with the merchant accounts of a few years ago have been drastically reduced as a result of a massive increase in competition among account providers. So if you’ve been relying on cost information you got even a few years back, you owe it to yourself and your business to revisit the merchant account industry and have a look at the prices being charged today.

In fact, not only are recurring costs like transaction fees and monthly fees a lot lower and more competitive, but a lot of the one-time fees, like application fees and set-up fees, have been eliminated entirely by many merchant account providers. Account providers today offer bundled deals with several services rolled into one low-cost package, allowing you to compete in a retail store, online, and by mail order and telephone – even through a wireless connection from just about anywhere in the world.

With the advent of ebay and other online sales sites, merchant account providers know there’s been a tremendous growth in small and even home businesses, and they’re reduced costs as a result, in an effort to tap into this growing market. So that’s why if you haven’t priced merchant accounts lately, you really need to revisit the account costs and fees. Chances are, you’ll be surprised by just how affordable these accounts are.

OK, that takes care of costs. Now let’s look at what it takes to start accepting cards at your business. First of all, you need to have a business license. If you operate a home business or you’re just starting out, call your chamber of commerce or city hall to find out a bout obtaining a license. Next, you’ll need a business bank account. Once you have those two things, you’re ready to open a merchant account.

A typical credit card purchase is processed in the following way: the card data is “captured” by a point-of-sale terminal or by your online shopping cart system when the customer enters the data on your website. That data is transmitted to the card issuer via the merchant account software or a gateway provider (a company that aids in online transactions). Once the card issuer receives the data, it identifies the account and ensures the card is valid and has not been reported stolen. Next, it ensures the account ahs enough funds in the credit limit to cover the cost of the purchase, Depending on whether or not these criteria are met, the card issuer transmits a code that indicates whether the transaction was approved or denied. The code is received by the merchant or the website and a receipt is issued. At the end of the day, the merchant account adds up the day’s sales, deducts any applicable fees, and deposits the rest of the money in the business bank account.

So now you know: merchant account costs are lower, and the process is pretty straightforward. Go ahead and apply for your account and do as Henry Ford advised: go on making your own business better.

Karen Zabel is a freelance writer who writes about Merchant Credit Card Processing Services.

Article Source: http://www.marketingarticlelibrary.com

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