HOW TO SECURE A MERCHANT ACCOUNT TO ACCEPT VISA & MASTERCARD
You can seriously increase your orders by accepting credit cards as
payment.
It's easy and convenient for the customer, and that makes it more likely
for
them to order. The only problem is that it's hard for a business,
especially a small mail order business, to gain the ability to accept
credit
cards.
Banks are very reluctant to authorize credit card acceptance, mainly
because they have been burned too many times by fraudulent businesses.
So,
many businesses go on, accepting only checks or money orders for payment,
and miss out on the added sales they would get through credit cards.
There
is a way, though, for businesses that can't get bank authorization
to accept
credit cards.
The easiest way to get a merchant account is to work with an Independent
Sales Organization (ISO), which acts as a middleman between small businesses
and banks. They will charge an additional fee for each transaction,
so you
will be paying a bit more than the standard percentage charged for
credit
card transactions. There will also be an application fee. Here are
the
typical charges to expect, as of this writing.
Application fees: Usually, these range from $95 to $400 and may or
may not
be refundable.
Point of sale terminal purchase or lease: The terminal you
use to process the charge and check for fraudulent numbers is usually
available from a bank for around $300. You will only be able to get
this
price, though, if a bank authorizes you. If working through an ISO,
prices
will range from $400 to even as high as $1500! You can usually lease
the
terminal, though, at an average of $45/month. The best thing to do,
though,
is to find an ISO that will provide computer software that can be used
in
place of a terminal. This will usually cost only around $150.
Concerning service fees: Banks charge between 2% and 5% for processing
a
credit card purchase. ISO's charge higher, usually 3% to 7%. They
also
usually charge a per transaction fee of 20 to 25 cents, and a monthly
statement fee of $5 to $10.
Why all these fees? ISO's only want to work with legitimate businesses
and ones that will stay with them for a long period of time. If a
business
can afford these fees, they are considered less of a risk. Thus, the
important thing to do is to shop around for an ISO. Get as much
information as you can about each ISO you are considering, and READ
it
thoroughly. Look for hidden charges and unreasonable requirements.
Here is a list of some of the ISO's you may want to consider. This
is
not an endorsement of any or all of them, these are just the most prominent
ones.
Bancard, Inc., 1233 Sherman Drive, Longmont, CO 80501 (800) 666-7575
Data Capture Systems, 231 Quincy St., Rapid City SD 57701 (605) 341
6461
Electronic Bankcard Systems, 2554 Lincoln Blvd., Suite 1088, Marina
Del Rey,
CA 90291 (213) 827-5772
Gold Coast Bankcard Center, Ft. Lauderdale, FL (305) 492-0303
Harbridge Merchant Services, 681 Andersen Dr., 4th Flr., Bldg. 6, Pittsburgh,
PA 15220 (412) 937-1272
Teleflora Creditline, 12233 West Olympic Blvd., Los Angeles, CA 90064
(800) 325-4849
US Merchant Services, 775 Park Avenue, Huntington, NY 11743 (516)
427-9700
A final word: All of these services will require you to fill out an
application. Be 100% truthful with everything on the application and
don't let the representative talk you into putting anything false down.
The reason is, if the banks affiliated with the ISO you use were to
find
out that any information on your application is false, you would probably
be immediately cancelled and your business name and address would go
on a
"black list."
This would prevent you from being able to accept credit cards
for an indefinite period of time. Don't let this happen to you. Most
of
the ISO's out there are legitimate, but there are a few that may put
down
spurious information, rather than lose the fees they'd receive. Be
sure to
look everything over twice. If you do, you'll probably find an ISO
that
will work with you to expand your business through the acceptance of
credit
cards.
