In business as in life, there are always multiple ways to go about just about anything. When it comes to gaining the ability for your business to accept credit cards as a method of payment, there are likewise many ways to get things set up properly.
There are a lot of options available to you in this area because of the huge amounts of money involved in the card processing market. Trillions of dollars worth of credit card transactions get processed per year around the globe. Each time a payment is made via a card, fees change hands.
These fees can add up quickly, making it a very attractive business to be involved with for many banks and other financial institutions globally.
You may be interested in the ability to begin accepting credit cards, but you also may want to skip the hassle of setting up your own merchant account. The good news is that doing so is very much within reason. You just have to learn the ropes in terms of how the card processing world works.
If you would like to accept credit cards without a merchant account, here are 5 tips for how to do so:
1. Understand the types of merchant accounts that you can sign up for:
When it comes to processing Visa and MasterCard transactions, there are essentially three main types of merchant account options that you can sign up for: banks, third party processors, and independent sales organizations.
When a person talks about setting up their own merchant account, they are referring to doing so through a bank. However, it is actually difficult for sole proprietors and other small businesses to qualify for a merchant account through a bank. There are good alternatives, however, including setting up accounts through third party processors and independent sales organizations.
2. Research their discount rate and fees:
As you evaluate third party payment processors, be sure to ask each one about the discount rate you will have to pay. The discount rate is simple a portion of each transaction you process via credit card, and the merchant account servicer gets paid the fee. They, in turn, pay other service providers a portion of that fee, and then keep a margin for themselves as profit.
Similarly, inquire about each provider s fee structure. Fees range far and wide. Unlike the discount rate, card processing fees are usually a fixed amount, such as a certain amount per transaction or per month.
3. Compare multiple merchant account service providers:
Make sure to contact multiple providers. Three to five providers is an advisable range. As you contact (or research via the Internet) each one, be sure to write down the relevant information about them. That way, it will be easy to make comparisons later on so that you can choose the best one for you.
4. Decide what type of terminal you will need:
Another important decision to make is whether you need a traditional (with wires) terminal, a wireless terminal, or a virtual terminal.
You have no doubt seen traditional terminals before if you have ever purchased something with a card in a store. Wireless terminals look very similar to traditional ones but are of course wireless; they are ideal for businesses that have a strong mobile component, such as a street vendor. On the other hand, if you plan to rarely handle customers card directly, a virtual terminal that you operate via your computer may be sufficient.
5. Contract with a payment gateway:
The payment gateway is the entity that physically processes the payments so that money can change hands. Some merchant providers have their own gateways, but in most cases you must contract with them separately from the merchant provider.
Consider these 5 tips as you determine the best way to get set up to accept credit cards without a merchant account.
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