How To Accept Cards – Overview
The Breakdown of Payments
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A Credit Card Machine: While there are hundreds of models available, one of the most commonly used machines is a Hypercom T7. Accepting cards is not as easy as buying a machine at Staples or Office Depot and plugging it in. You must choose a Merchant Services Provider/Bank and apply and get approved to accept them first. The Merchant Services Provider will want to know some basics to prevent issues and fraud. To summarize:
A. What will you be accepting payment for?
B. What will the average cost of a product/service be?
C. What sales volume are you likely to do per month?
D. How far in advance will you bill the customer before the products are delivered or services performed?
E. What is your return policy?
F. Will your transactions be performed face-to-face or will you punch cards in over the phone or internet?
If you haven’t thought about these things, you need to before you attempt to sign up. If you make it up as you go along on your Merchant Services Provider application, you may end up approved to accept cards but find your account getting suspended later on when you do something outside of the realm of your supposed business model. An important tip is that you do not have total discretion over certain sales policies. For instance if you accept payment for something today for a service to be performed 5 years from now, what can you do if the customer changes his mind the day after you’ve taken payment? A hardline seller may wish to state ‘Sorry. No Refunds’. Fortunately for the buyer, MasterCard and Visa won’t let you do little things like that.
Visa has managed to summarize their policies into a short 1,200 pages. If you really want, check it out here: VISA REGULATIONS
If you’re having trouble setting up your own payment policies or don’t know if they’ll fit within the required guidelines, your Merchant Services rep should certainly be able to help walk you through it. If it sounds like they’re unsure or you don’t know where to turn, the authors of this site will provide free advice. Just click the Contact the Experts link:
A WIRELESS CREDIT CARD MACHINE: Same as above except it has the ability to go where you go and not be plugged in at all times.
A POS SYSTEM: Technically a credit card machine is a POS (Point of Sale) tool to accept credit cards. If you’ve ever been in a restaurant or franchise retailer, you may notice an advanced network of computers with credit card swipers built in. Generally it’s referred to as a POS System if there is special hardware and software involved in accepting the cards. Good POS systems costs can range from $1,000 to the tens of thousands of dollars, depending on the complexity of the system and the amount of computers/stations/swipers there are. There are usually installation and contract service costs involved. You may be bound to to use a specific Merchant Services Provider as well. There are industry specific systems you can purchase that are meant ONLY FOR SALONS, ONLY FOR RESTAURANTS, ONLY FOR FITNESS CENTERS, etc.
If your business is big enough to be using a decent POS System, the main advice I can give you here is to find out these few things about the company you bought your POS System from:
1. Is there an exclusivity clause to use as specific Merchant Service Provider?
2. If you wish to change your Merchant Service Provider, are there limitations to which Providers the system is compatible with?
3. Is there a cost to change Merchant Service Providers?
4. How long would it take to change Merchant Service Providers?
5. Is the POS System PCI Compliant?
Imagine you’ve done months of research or spent 5 minutes on this site and have decided to change to a lower cost Merchant Services Provider, only to find out your POS Company does not let you. Imagine you determined that your business had the potential to save $300 a month by changing. How upset would you be when you find out your stuck with what you have? So make sure you ask as many questions as you can before hand!
POS SOFTWARE: Want the advantages of a fancy POS System but don’t need the huge network and fancy computers? You can easily go to a computer/office supply store and buy software for your regular computer. You can also purchase a card swiper that plugs right into a regular USB port. It’s that easy. A hair salon can track appointments, inventory, and accept card payments all within one software program on a laptop.
Just a heads up again that you will still need to apply with a Merchant Services Provider to accept credit cards. Make sure the software doesn’t lock you into one Provider in case you find yourself wanting to change later. If you want to know what kind of things are required to apply to accept cards, refer to the list in Red above.
Photo by: www.micros.com
ONLINE SHOPPING CART/PAYPAL: If you sell your product or service online, you can accept cards via PayPal or a shopping cart. If you go the Paypal route, your work will be cut out for you. Once Paypal approves you to accept cards, they will provide you with software and the means to process the transaction. For an online shopping cart, you will still need to pick out a Merchant Services Provider too. The issue of a ‘gateway’ may come up as well. If it does, find out if your shopping cart is compatible with Authorize.net. If you decide to change your shopping cart software later, it will be a lot easier and convenient if you’re already using Authorize.net as the gateway. i will build on this another time.