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Home  Money Business How To Secure A Merchant Account
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How To Secure A Merchant Account |
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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 (954) 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 any incorrect
information
in the application. 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.
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