Card Processing How-to For New Businesses

By Author: Hugh Springer
Total Articles: 4762
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In today's technologically advanced business world, it's almost essential that every business that has any sort of retail or service outlet is able to process credit and debit cards as a method of payment. Research shows that the vast majority of customers choose to make purchases with their credit cards over cash or checks. One of the main reasons for this is the convenience of simply being able to swipe a card and then having the funds deducted from your account. It is therefore important for a new business to be able to accept and process credit cards. Getting started, however, is not always that simple. There are so many things to consider that the task can be quite daunting. Here are few tips on how to go about researching and setting up a card processing facility for your new business.

Analyze Your Business Needs First

Look at what type of products or services you are selling and what platform you are using to reach your customers. In other words, are you an online retail store or service center? Will you have a shop in a mall or at a flea market? Will your customers be physically present when you process ...
... the transaction? This information will help you choose the right kind of processing system for your business. The second thing to consider is the number of transactions you hope to process and what their average value is. This information will help you negotiate a good rate with your merchant service provider.

Compare Your Options

If you can, try find out from other retail stores what systems they use and if they are happy with the functionality of the system. Also do some research on the Internet and look at the different types of packages offered by different merchant service providers. Speak to your bank and find out if they have any recommendations or preferred merchants that they work with. A good idea is to draw up a table so that you can compare the various options.

What Does Card Processing Have to Do with a Merchant Service Provider?

In order to accept and process credit card transactions, you need to have a merchant who can process the transactions on your behalf. When the customer is in your store, the merchant's function is to accurately read and record the customer details from the card when you swipe it. Their system then checks to see if the customer has sufficient funds in order to make the purchase and if so, they give the necessary authorization. The client will then sign the merchant slip and leave your store with the goods purchased. For you and the merchant, however, this is just the start of the process. At the end of each day, the card processing machine will batch together all the transactions and bank them so that you can receive the funds into your account. Once that has been done, the merchant service provider then contacts all of your client's banks through their system and gets the funds from their account in order to transfer if to your bank account. When processing this information, there are stringent security measures that are in place to ensure that clients' security information is not compromised in any way. For processing all of this, the merchants charge a fee which is generally a percentage of the value of each transaction plus a small flat admin rate. At the end of each billing cycle, you will get an account based on all the transactions you have processed in that month.

Things to Look for in Merchant Service Providers

Starting out you will probably need a fairly simple merchant processing system. However, as your business grows, you may want to expand to have an online store as well. Look for a merchant provider that allows you to upgrade and has the technology in place in order to do this quickly and efficiently. Next, look at how the merchant processing system will integrate with your back office accounting or inventory system. Some card processing systems are an all in one point of sale system that integrate all of that for you so that you don't actually need to purchase a separate accounting or inventory management system. Next, it's essential to see if they are conscientious about fraud protection. A good merchant provider will have industry compliance certificates and information available to help you protect your business from possible fraudulent transactions. Ideally, there should be a help desk where you can get assistance and ask questions.
About Author:
At Card Processing Pros.com we provide credit card merchant services and debit card processing, literally setting up hundreds of clients per month to process card payments for storefront, Internet and phone/mail order-based businesses. We also offer services in electronic check and gift card processing. Visit online today.