How To Accept Credit Cards

The use of credit cards has become a mainstay of commerce as people continue to turn away from cash and checks.  The latest statistics show that the average person carries four credit cards and prefers to use them for most financial transaction. For any business, either on the internet or the physical storefront, the ability to accept credit cards is a must.  Simply by providing the ease of purchasing products or services by credit card, a business can double or triple sales.

There are essentially two methods of how to accept credit cards.  The first is through a "merchant account" with a bank, either directly or through a third party payment gateway, which enables you to accept credit or debit card transactions.  This can be accomplished by use of a credit card terminal, through an online processing system, or by voice authorization over the phone.

Establishing a merchant account with a bank requires an agreement between the parties based on your past credit history, the Articles of Incorporation if your business is a corporation, business and personal tax returns and financial records.  The banks require this information to protect themselves from chargebacks and returns.  The best way to start the process of acquiring a merchant account is to visit one of the larger local banks to start the paperwork process.

Rather than utilizing a direct merchant account, many businesses have turned to "Third Party Merchant Accounts" or "Independent Sales Organizations" (ISOs), which accept credit and debit cards on your behalf.  By utilizing an ISO, the initial setup fees are bundled into a flat fee. The ISO actually holds the merchant account with the bank, processes the credit cards and deposits the money into your business account. While the majority of ISO providers offer online storefronts, they can also be used for face-to-face transactions through a computer.

There are hundreds of ISOs available for merchants, but a few stand out as being exceptional and should be considered. Perhaps the largest and most widely-known ISO offering credit card processor is PayPal, while another competitor worth looking into is Amazon's Flex Payment System.  Both of these have excellent reputations and can handle online transactions, storefront operations and person-to-person sales through an internet capable cell phone.

Research what is available with your specific needs in mind, the volume of transactions and the amounts to be handled, and soon you will be set up for successful payment processing!


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