My merchant account bank was one of those California banks that closed its doors. After nearly 20 years, I was shopping around again for the best way for my company to accept credit cards. Thought I’d share a few of those tips with you this week to help you if you’re searching for the best merchant account for your business.
The quick and easy low-cost way to start accepting credit cards in your business (Visa, MasterCard, American Express and Discover) is through PayPal. With PayPal you can set up your merchant account instantly, there’s no credit check involved (except with their Pro version), you don’t arrange for a separate gateway account and credit card deposits are instantly credited to your account. PayPal does have drawbacks. The process for setting up each new product is a wee bit cumbersome. [Editor’s Note: Unless you integrate your PayPal account with a WordPress Shopping Cart, such as Cart 66 or Shopp – makes life easier to add products!] And if many of your clients like to pay by check, it usually takes 3-5 days for checks to clear. The fees are pretty reasonable and there are no set up fees or monthly fees. You can use a PayPal debit card to pay your bills, but if you want access to the money in your business account, you’ll need to sweep it over, which takes 3-5 business days.
A standard merchant account will automatically sweep the money into your bank account for you. And e-checks usually clear immediately. When comparing merchant accounts, make sure you know ALL the fees that will be included: Setup fees, gateway charges, discount rate (usually 1%-3% of the purchase amount), transaction fee (another 1%-3% of the purchase), and monthly statement fee. Some merchant accounts also charge you if you don’t meet a monthly minimum amount of sales.
What does all this mean for your bottom line? Make sure your product prices take these fees into account. Adding in an extra 10% to account for all your merchant fees is a good standard practice, once you’ve established your cost basis and your profit margin. For more details on how a merchant account works or to compare different accounts, visit www.merchantaccountguide.com or www.shift4.com. Both have wonderful resources for just about any question.
Editor’s Note: If you have a business that you sell at events; back of room sales, festival’s, etc. check out this neat little, and inexpensive way to accept credit cards using your mobile phone! Square
What do you use or how do you accept credit cards? Please share by leaving a comment below and be sure to sign up for our blog posts while you’re here!!
Paula Langguth Ryan is a mediation and marketing maven, specializing in financial issues for small businesses. She’s the creator of the Supersonic Prosperity Oriented Copywriting System http://www.paulalangguthryan.com/shop/supersonic-copywriting/ and provides strategic financial consulting services to small business owners. She’s also the author of Bounce Back From Bankruptcy: A Step-By-Step Guide to Getting Back on Your Financial Feet and the forthcoming Break the Debt Cycle – For Good! You can follow her on Twitter at copytamer and get free resources at www.paulalangguthryan.com. If you need help or assist please email us at firstname.lastname@example.org.