Tips for Small Business Credit Card Processing

Merchant Warehouse |

December 7, 2010

Customers like the ease of swiping a card to make a payment in a store, or keying in numbers for an online purchase. It’s fast, easy and straightforward. Whatever kind of small business you have, not giving customers the option of using credit or debit cards can reduce your revenue and inhibit your growth.

Check writing seems like nothing so much as a thing of the past. Some people still carry small amounts of cash, but not the amounts needed to make serious purchases. They tend to use credit cards for these. Clearly, credit card processing is as important to small companies as large ones.

Expand and Grow

 Offering credit card processing – by phone, mail, email, online or in-person – will allow your firm to expand in several ways. You can process payments from all over the planet, and can receive funds in just a few minutes. Businesses of all sizes can attract customers and clients from countries around the world, and this is just one of the important growth-oriented benefits of credit card processing.

There are lots of ways to receive and process credit and debit card transactions and choosing the appropriate one for your business is critical. Small firms and individuals who sell on eBay and other auction sites like can receive payments through the PayPal service, essentially a third-party merchant account. You can do the same on your small business website with your products. The customer can shop there and purchase from your site with the PayPal link. But is this the best way?

Operational Advice

Small businesses should consider applying their own merchant accounts, and not continue using a third-party one, as soon as there is steady business. This is really mandatory for all businesses. Small storefronts can process payments on site with a credit card terminal, as well as offer direct credit/debit card payments on their websites. Once you have your own merchant account you will have many ways of implementing it, and all reputable firms offer good assistance through their customer service departments.

The old-fashioned payment methods have long since passed, and if you don’t take credit cards you are seriously behind the times. You can get excellent advice in other articles on how best to shop for and decide on a merchant account, but there are some general tips that will help small businesses once they start down this road:

  1. Don’t rush into a deal. Shop around, compare rates (and all the fees, too) and talk to colleagues and neighboring businesses about their own experiences with both credit card sales and merchant accounts.
  2. Once you have made your decision, get everything explained to the nth degree. Make sure you understand your deal with the provider, and if you have employees, bring them up to speed, too. Don’t get pressured into a long-term contract and don’t agree to any “package deal” that doesn’t give you the options you need for equipment, customer service assistance and other provider support. You should not be paying extra for normal services.
  3. Go by the book – your book! This means writing up a manual of procedures for everyone who will be processing credit card sales. You need to enforce a uniformity of processing and adhere to all the rules, and you will be getting lists of requirements from both the credit card associations and your account provider.
  4. Make security and safety the most important thing. Train yourself and your employees, if you have any, how to spot fraud, whether in person or over the Internet. Stay current on scams, read the provider’s and credit card associations’ newsletters and bulletins, have your wits about you and follow the established security procedures.


Basic Common Sense

You may wish to start out with a third-party provider like PayPal, but keep track of how much business you are doing and what the service is costing you. At some point in your growth, it will make economic and financial sense to have your own credit card merchant account. However, if you don’t keep (and read!) good records of sales, income, expenses and so on, you will not be able to make this important calculation.

Therefore, one of the best tips, at the start of your credit card journey or at any point in it, is to stay focused, informed and involved in the process. Learn everything you can about credit card processing, the rates and fees, the legal side of things and the illegal side, too. Knowledge is power, in any business or undertaking, so commit yourself to becoming as much of an expert at credit card processing as you can be.

Final Thoughts

Of course, if you don’t think you have a “head for numbers” or find that it is a confusing subject, by all means get help. There are two main kinds of help to get, too. First, get all the help you can from your account provider, making full use of the customer service department at all times. But second, get help – from articles like this, consumer affairs websites, small business groups, etc. – on the best ways to approach and work with your account provider.

The relationship between a business and its merchant account provider has two sides to it. On the one hand, the account providers want you to do well, because more sales for you mean more income for them. On the other hand, they have an incentive to make as much from your business as they can, hence the different fees and changing rates. For a small business processing credit cards, the most basic tip of all, then, is “Look Out For Number One.”