For the small business owner looking to increase potential for more sales, giving customers the option of paying with a credit card definitely works in their favor.
While many consumers are looking to trim their credit card expenses in today’s challenging economy, a large number of these same individuals also see the need and convenience at times of using a credit card to pay for a purchase. Whether it is in person or looking for the merchant who will accept credit cards online, consumers want options when they shop.
As a small business owner, not giving them options is lessening the chances that they will do business with you in the first place.
So, how can the small businessman or woman shop for the right merchant account that allows them to save money over the long haul, increase sales, and keep their business up to speed with what today’s customer demands?
Among the things to keep in mind when shopping for a merchant account:
* Customer convenience – Not all customers have readily available cash on hand when wanting to make a purchase. If you do not have a current merchant account, setting one up makes good business sense. With it, customers can then not only shop in person with you and charge items, but you can also do business with them online. As more and more shoppers like the option of browsing and shopping from the convenience of their computers and mobile devices, having a merchant account just makes good business sense. Lastly, studies indicate that consumers will pay more and make more purchases when they can use a credit card as opposed to cash;
* What are my merchant account options? – As a small business owner, there are ways to save money on your merchant account. You can not only accept credit cards, but also debit cards, mobile credit card processing and iPhone credit card processing where applicable. Keep in mind that merchant accounts and credit card processing businesses generally charge credit card processing costs as part of each transaction. Business owners should shop around when looking for merchant accounts, making sure to read the fine print with each offer;
* Turning to your bank – Many small business owners will opt to go through their bank for a merchant account. Many banking establishments will require the small business owner to have a minimum of two years of business activity prior to opening a merchant account. In a number of cases, fees for starting a merchant account are generally higher with one’s local bank as opposed to an online merchant account or third party account. That being said, transaction costs, however, are typically less;
* Know the process – When shopping for a merchant account, keep in mind that you will require a gateway and a processing application in order to accept credit cards from customers. The gateway is the means of gathering credit card details from the consumer and signing off on the payment. The processor in turn is the bank or group actually completing the credit card transaction. Both online merchant accounts and third party merchant accounts generally offer both the gateway and processor at the same time. Finally, you may also require recurring billing, remote credit card storage, and unique solutions for Payment Card Industry (PCI) compliance, so make sure everything is in place before you begin advertising to customers that you accept credit cards;
* Contract for success – Finally, one of if not the most important things is the ability to move stored credit card information. In many cases, providers will keep your credit card data under their control, meaning that if you have some 10,000 credit cards with them, changing providers will require asking those 10,000 customers to re-enter their data. What that boils down to is you will spend more money for such transfers. As mentioned earlier, reading the fine print is crucial so that you avoid penalties. Signing a shorter-term deal on your merchant account makes more sense so you have the ability to switch providers down the road if you’re not happy with the present one.
In an effort to save money and make more money over time as a small business owner, take credit if you were wise enough to offer credit card payments when you began your business.
With 23 years of experience as a writer, Dave covers a wide array of business topics from starting a small business to hiring the right employees.