Why Credit Card Processing Makes Good Business Sense
Imagine a brand-new member anxiously walks into your facility, eager to buy whatever is in sight. As he stocks up on gear, ready to make his purchase, you have to break the bad news: “Sorry, we only accept cash“. The member races to find some money but only has a few bucks in his pocket. He has a credit card on hand but you don’t take credit cards. Your member leaves disappointed and you lose a sale.
Is this you? Are you missing out on opportunities to grow your business? People rarely carry cash anymore; and when is the last time you saw someone with a checkbook?
To stay competitive in today’s marketplace, you have to provide what customers demand, and that includes the convenience of paying by credit card.
In fact, many people prefer to pay with credit cards to accumulate reward points and miles. Credit cards also help customers organize their transactions and provide buyer protection services, which make them a preferred payment method in many cases.
Accepting credit cards also provides several benefits to businesses:
- Cash flow typically improves — regardless if there’s an increase in sales
- Rather than sending an invoice and waiting for that invoice to be paid (or anticipate a check to clear), the money from the sale goes directly to your bank account
- You decrease the likelihood that you won’t receive payment by capturing the funds as close to the time of sale as possible
- And last but not least, an increase in sales
Many small businesses shy away from credit card processing because of the fees involved. However, numerous studies have shown that the average size of credit card orders can be as much as three times greater than those paid by cash or check. All said, the increase in sales heavily outweighs any expense incurred — making it a wise investment. Also remember … if you don’t accept credit cards, are your competitors doing the same? Or are they allowing credit cards and providing an advantage that you aren’t providing?
How to Get Started with Credit Card Processing for Your Business
In order to take credit card and debit card payments on-site at your place of business, you will need to do the following:
Step 1: Get a Merchant Account
A merchant account is a special type of bank account that allows your business to accept payments by credit or debit card. Merchant accounts also provide the ability for you to receive monthly statements detailing your business’ processing volume. To learn more about merchant accounts, visit csipay.com/overview.
To obtain a merchant account, you will need to apply under a merchant agreement with a reseller or bank. The application process is fairly simple and requires that you provide some background information about you and your business, along with some supporting documentation.
What you can expect to pay: The processing fees you will incur usually represent a small percentage of the transaction and a set amount. When shopping for a merchant account you will often see rates advertised that try to lure you in with a cheap transaction fee. Make sure you review ALL of the fees that you will pay. Many times, in addition to the low-cost fee, advertised, you can expect to pay different rates depending on whether you swipe or key in the customer’s credit card number. These fees combined together make up what you can expect to pay for credit card processing.
Step 2: Work with a Level One Payment Card Industry (PCI) Compliant provider.
The PCI Compliance standard was created by the credit card industry in 2006 as a way to prevent sensitive credit card information from being compromised to avoid credit card fraud. To comply with the requirements you need to make sure you work with a secure, certified processor to ensure the credit card information is securely stored and that the payment requests are processed in a secure manner. The processor, who provides you with your merchant account, will be able to explain this more fully and educate you on best practices when accepting credit cards at your business.
Step 3: Establish a way to capture transactions.
This is accomplished with a credit card terminal or reader. You are probably already familiar with them when you have shopped in a retail location and used your credit card. The reader can be configured to work with other software solutions, such as a front-desk system to help manage your Fitness facility. Once you start processing credit card transactions, the transaction amount will be sent to your bank account minus the transaction fees that are withheld.
There are numerous readers that exist and you can shop and select the best reader based on your needs. Some are even wireless if you want the flexibility to move around when processing payments.
Remember earlier when I mentioned that you can expect to pay processing fees when accepting credit cards? These fees will actually change depending on the manner in which you capture the credit card transaction. You should try and swipe the actual credit card whenever possible since that will help provide the cheapest processing rates for your transaction.
Getting started with credit card processing may seem a bit daunting. Don’t worry ― it is easier than you think. There are many great resources out there to help you get started. Make sure you pick a reliable, dependable partner; and in no time at all, you’ll realize the many benefits that credit card processing can bring to your business.
About the author: Steve Pinado is the CEO for Member Solutions. Recently, Member Solutions launched a new affiliate business, Constellation Payments, to deliver secure and reliable payment processing for merchants. For more information, call 888.248.7060 or send an email to firstname.lastname@example.org.