Tips for Setting Up Merchant Account to Accept Credit Cards

This blog post is written by Shannon Martin.
Most small businesses are overpaying for credit card processing. In our conversations with number of small business owners we have not come across a single owner who does not hate credit card processing companies for the exorbitant amount of money they charge. That is why it is important to do your homework before you sign up with the merchant processing company. In this post we provide useful tips you should keep in mind when talking to credit card service providers.

Setting up a merchant account isn’t all that difficult as long as you know what you need to do business and avoid being talked into something you don’t want. Go directly to a merchant account provider. While you may be able to apply for an account at your local bank, the bank is probably going to outsource the services to a card processing company anyway.
In most cases, it only takes a day or two to set up an account, but plan for accepting credit cards at least weeks in advance. Apply to more than one merchant services company. Having several companies competing for your business can give you more negotiating clout when it comes to getting the best merchant account rates.
Go with a card processing company that has an established reputation. Newer companies often offer great rates, but you want to work with a provider you already know is reliable. A company that has plenty of experience processing credit card payments is more likely to save you time and money.
Be clear about the merchant account rates before signing on. Generally, merchant services companies advertise their rates for retail merchant accounts. These are usually lower than what you will pay for credit card transactions for mail order or online purchases. Companies consider retail purchases a lower risk, which is the reason for the lower rates.
Find out ahead of time what your fees will be. That way, you can avoid surprises after you have established an account. Fees and merchant account rates vary depending on the card processor. Some companies charge fixed monthly fees for their services. Others charge a percentage of the amount on each sales transaction. There may be additional one-time fees such as application or cancellation fees. Some companies even charge a fee for the use of debit cards.
No matter what your contract specifies in the way of fees, find out if the rate you’ve been quoted is the discount rate. If not, ask if you qualify for that rate. The discount rate is the lowest rate you are charged to accept credit cards. Be aware that companies charge online, phone and mail order businesses a higher rate. Inquire about money back guarantee. Reputable merchant account providers often allow you to try out their services for a specified period of time. Not all card-processing companies require merchants to sign a contract either.
Learn all you can about a merchant services provider. Review any contract carefully before you sign. If a company wants you to commit to a longer-term contract, it should be offering you a discount in return. Ask questions about any terms of the agreement you don’t understand. It only makes good business sense to know what to expect before you get your first statement.