How Do Merchant Services Work?
Making sales these days is highly competitive and if you are not accepting charge and debit cards, you are missing out on sales. There are many different types of processing equipment deals as well as variables in merchant services. Learn how merchant services work and put them to use to make sales you may have been missing. You pay for processing and equipment, but it is well worth the minimal investment for great returns.
Accepting Cards
Accept a debit or credit card from a customer and swipe the card on processing equipment or input the card number and information over a telephone line. Data is transmitted, verified and should be approved instantly.
Realize each merchant service varies considerably. In almost all cases, you can rent or buy terminals from the merchant service. Take time to shop around. Just because they offer the equipment as part of their service does not mean it is the cheapest way to go. Often you can sign up for their processing service and supply your own equipment so long as it is compatible. Decide whether you want a terminal with a built in printer or consider a separate printer that is plugged into the terminal.
Processing by batches after a week's worth of sales is the typical method most people use. You direct the weeks worth of sales to be deposited electronically into your bank account. It takes an average of one or two days before you see the money in your account.
Merchant Processing Costs
Spend time comparing notes with other people you know that already accept cards. You will find that there are several different options for merchant services and many will cost you way too much money if you choose the wrong service.
Compare several merchant services online and calculate what it will cost you to process the money for an average sale at each company. There are reasonable services out there, but several tack on additional charges that cost you extra processing charges. The cost of processing cards comes straight off your profit margin. However, you can right off these costs and equipment costs as part of doing business on your income tax.
Expect to see several types of fees for merchant processing. There can be transaction fees, percentage fees for each processed sale and monthly charges. If your sales are seasonal be cautious of those that charge monthly fees for the months you are not using their system.
Give yourself flexibility by only committing to a one year contract. Odds are good you may find a better service and wish to switch at a later date.