How to Choose a Credit Card Processor For Any Business

Launching a brand new business can be overwhelmingDo your homework as all of the established terminal
and stressful, especially if it is your very first foray intomanufacturers build devices that are compatible with
self-employment. One of the most pressing issues isall of the major banks. While there are thousands of
choosing who processes your credit card payments.merchant services providers out there, all of them
You will have to gather quite a few things whichhave to have the backing of a bank such as Wells
require you to set up your merchant account. Below isFargo, HSBC, or Chase to conduct business with
a comprehensive list most banks require to open aVISA, MasterCard, Discover, or American Express.
merchant account.Established terminal manufactures build devices that
1) Checking account - You can use a personalare fully compatible each of the banks processing
checking account if you are a sole proprietor butsoftware. If you buy a terminal that is only designed for
incorporated entities need a business account.a particular merchant service provider, you will have to
2) Business license, reseller license, or articles ofbuy another terminal if you ever switch providers!
incorporation - Merchant Service providers need toPayment Gateway
make sure you are a legal entity and are allowed toIf you plan to conduct business and receive payments
conduct business in your area.online, you'll have to setup a merchant account with a
3) Pictures of your offices/store front - With the largepayment gateway. You also can setup a Google
amount of fraud and the simplicity of gettingCheckout or PayPal account for online sales, but they
incorporated, merchant service providers need tolimit you to customers who have those accounts. We
verify you are conducting business in the locationsuggest a combination of both to maximize your sales
specified. Many will actually visit your place of business.and revenue.
4) Website - Mandatory if you are conducting onlineA payment gateway is the online equivalent of a
business but not necessary if you are a physical storephysical Point of Sale Terminal. It provides secure
that does not take orders online.transactions and protection of the customer's credit
5) Return - Merchant Service providers require acard data. In most cases the payment gateway is a
written return policy printed on your receipts.separate company than the merchant services
6) Tax Returns/Financial Statements - Your past 2provider. The largest payment gateway is
years tax returns as well as profit/loss statement areAuthorize.net, and you'll find most merchant service
required to receive the very best rates.providers out there will use authorize.net as their
After you become qualified for a merchant servicespayment gateway. Large banks such as Chase have
account, the next step is to decide your methods oftheir own payment gateway so you should investigate
receiving credit card payments.which works out best for you.
Point of Sale (POS) TerminalCustomers should be aware that online transactions
In our experience helping past clients' setup theirhave a higher transaction rate due to the higher risk
ecommerce websites to compliment their physicalfactor. There really isn't any way to get around these
store, we found that setting up the physical POShigher rates. Another fee you should be aware of is
terminal is where they were taken advantage of thethe monthly minimum for a payment gateway, which is
most. From our research and experience, BUY theoften an extra $30 per month.
credit card terminal instead of leasing it. Virtually all ofNegotiating Fees and Rates
the merchant providers partner with a leasingDepending on your sales volume and banking
company to lease terminals to customers. The salesrelationships, you can haggle for a lower rate. What
people earn more from leasing you're a terminal thanour clients should know is that the only rates that are
they do opening up an account. A simple swipeset in stone are the one's charged by VISA,
terminal might cost $400 but we found the merchantMasterCard, Discover, and American Express. You'll
providers charging $50-90 per month for a terminalnever receive those rates exactly because of the
with a 3-5 year contract. If you do the math you'll becosts incurred by the banks and merchant providers
paying thousands for an item that cost $400. Just do aand the fact that every business needs to make
Google search of credit card terminals and you'll findmoney, but you can negotiate rates and fees
they cost around $400 for the models you see atdepending on your sales volume.
most mom and pop stores. (Btw, the sales personConclusion
makes approx $500-800 from the sale of a leasedWe hope this article has helped you on your path to
terminal from our research. If you don' t believe us, gochoosing the right merchant services. A great
on Hotjobs or Monster and pretend to want a job.resource you should go to is the Better Business
They'll explain the commission schedules to you!) WeBureau when choosing a merchant services provider.
also recommend avoiding free terminals. If you readBefore we let you go, I wanted to let our client know
the terms carefully the "free" terminal costs thousandsthat Twenty Tigers does not take a percentage of
more over time due to the higher transaction rates.any of your sales for ecommerce sites like some of
Additionally, if your customers pay by debit transactionour competitors, nor do we get a fee or commission
(i.e. entering their pin) on a physical terminal, you havefrom any merchant service or payment gateway. We
to pay a swipe fee but no transaction rate. We'vecan set up your site with PayPal, Google Checkout,
seen some merchant providers charge a percentageand ANY merchant service or payment gateway you
rate on debit transactions. Those merchant providerschoose.
are being dishonest and should be avoided.