Small Business
Credit Card Processing
FREQUENTLY ASKED QUESTIONS
How does a business get set up to accept credit cards? The business must submit an application for a "Merchant Processing Account", also known as Merchant ACcount, a type of financial account not dissimilar to a checking or saving account. Once approved, your business will have the capability of accepting credit card payment for your goods or services.
WHERE do I go in order to apply for this "Merchant Account"? Merchant Accounts are issued by financial institutions who have entered into a specialized licensing agreement with Visa and MasterCard. These institutions are known as "Acquirers" and there are several dozen of them, large and small, throughout the nation. Merchants generally contact them through toll free telephone numbers, via the internet, via third party referral sources, or through Independent Sales Offices (ISO's) the Acquirers contract with to market their services
Once my application is approved, how do I actually get set up to accept credit cards? The sales agent via whom you applied should guide you through the entire process and arrange everything. This should include equipment selection and acquisition, financing if applicable, programming and setup of the equipment to suit your specific needs, training, and day-to-day support. If ALL of the above are not included in the package you select, it's time to find a new sales agent and/or Acquirer as shortchanging yourself in any of these areas will cost you BIG money in the long run. See HOW PROCESSORS SHORTCHANGE YOU section of this website.
I assume my Merchant Account will allow my business to accept credit cards. How about debit or check cards? Checks? Most systems include the functionality to accept signature debit/check cards, which are really one in the same. But be sure to ask just the same. The REAL issue regarding Signature Debit is whether or not you are receiving the reduced signature debit pricing you are entitled to, or if your processor is shortchanging you by pocketing the difference. See section on DEBIT CARDS to find out about this. On-line debit cards are another story since they require special setup and additional equipment. CLICK HERE to find out if your business needs the capability of on-line debit. CHECKS are a separate issue, requiring a separate provider, agreement, and equipment. Click here for information on CHECK GUARANTEE AND CONVERSION Services
How about some phone numbers of well-known Acquirers I can contact directly for my Merchant Account? Here are a couple of well-known processing Acquirers we like a lot. We recommend that you avoid the no-names and go with companies you've heard of like these. You can contact them directly and apply online immediately. They all offer some of the better processing programs in the industry. Does everybody get approved for a Merchant Account? Unfortunately, no. If you're on the Match List (see GLOSSARY), have poor personal and/or business credit, have a business that the Acquirers consider to be high risk or are otherwise unacceptable, or as a result of several other factors, your application may be declined. TIP: If you pay an application fee, make sure it is refundable in case of decline. Lots of unscrupulous sales people make a very good living collection non-refundable application fees from prospective merchants they know from the start have zero chance of being approved.
What if my application is declined? There are some alternatives out there for Merchants who don't qualify (or don't need) a traditional Merchant Account. We would suggest PAYPAL.
Are all Merchant Accounts the same? No. There are specialized account types and providers for retail accounts, mail/phone order merchants, internet ecommerce, high-risk business types, and many other categories. Pricing, fee packaging, marketing ploys and many other aspects vary greatly from provider to provider. Please take the time to carefully review the RATES and TOP TEN MISTAKES sections of this website in order to determine what is the best deal for your particular situation.
What's so hard about choosing a processing offer? Just pick the one with that quotes the lowest rate...right? Wrong. That's a trap you don't want to fall into. Don't confuse 'low rate' with 'low cost'...they're not the same. Please carefully review the section MERCHANT SERVICES PROCESSING DISCOUNT RATES in this website to find out how this works.
I already have a credit card processor. I'm being hit on by a competitor who showed me how I can save tons of money by switching to his processing company. He even did a side-by-side comparison of my present processing bill showing how much lower it would have been with their plan. Should I switch companies? Be very careful. You are about to be fooled by the oldest trick in the book, the "T-Sale" comparison (named because the side-by-side comparison looks like the letter T). The shortcoming with T-sale comparisons is that the savings proposed by the plan they are trying to sell you are all based on fantasy best-case-scenarios that NEVER exist in the real world. And you'll find that when the real world realities kick in as they always do that the new plan is MORE expensive, not cheaper, then what you had before. Go to TOP TEN MISTAKES, then to MAKING FAULTY APPLES VS ORANGES RATE COMPARISONS for details.
A processor is offering me free credit card equipment if I sign up with them. Is this a good deal? What's the catch? In the first place, the equipment isn't really 'free'. They'll let you USE it for free for as long as you remain their customer, after which you have to give it back. That might not be 'bad', but it's not the same as 'free'. In the second place, most 'free equipment' plans have higher rates and processing fees as conditions for providing the freebies. So if you do lots of processing volume, you'd be better off buying the equipment and getting lower processing charges. Go to TOP TEN MISTAKES section of this website, then to FREE EQUIPMENT SCAMS.
What is "Interchange"? In layman's terms, think of Interchange as the wholesale cost of Visa and MC processing charges which the Acquirer 'buys' from Visa and MC, then marks up and re-sells to you the Merchant. Technically, Interchange describes the clearing process that Visa and MC associations provide to setle transactions between the institutions that issue cards to consumers and the banks or processors (Acquirers) that process Visa and MC transactions for you the Merchant.
What is a Chargeback? As the name implies, after having paid the Merchant for a particular charge transaction, the processor is obliged to take the money back (charge back) for that transaction for any one of a number of reasons, typically because the consumer customer or the customer's bank finds something wrong with the transaction. Look up "CHARGEBACK" in glossary section for more details
What is CVV2? CVC? See GLOSSARY. It is NEVER acceptable for merchants, acquirers, or service providers to store or retain CVVS or CVC data for any reason.
What is CISP? PCI? See GLOSSARY. This is a very important concept for Merchants to understand since non-compliance may subject the offending Merchant to significant fines.
Do I have to buy equipment, stackers, and supplies from the processor? Can't I get better pricing anywhere else? You do NOT have to buy from the processor, although certain people may try to convince you otherwise. There are much better deals out there on equipment and supplies. CLICK HERE FOR CREDIT CARD MACHINE LOW PRICE GUIDE.
A HREF="http://www.merchantservices-help.com/credit-card-supplies.html">Click here to order rolls, ribbons, and all credit card supplies at wholesale prices
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All merchant accounts are referred to and processing services provided by: North American Bancard, a registered ISO/MSP of HSBC Bank USA, NA, Buffalo, NY; Paymerica LLC, a registered ISO/MSP of Wells Fargo Bank, NA, Walnut Creek, CA.; or Innovative Merchant Solutions, a registered ISO/MSP of Innovative Bank, Oakland, CA. and National Bank of the Redwoods, Santa Rosa, CA.
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