Action Steps for Best Credit Card Processing Terms
The best contacts and resources to help you get it done

Find point of sale terminals for credit card processing

These handy machines come in different forms, shapes and sizes for specialized business. Look at your volume of daily credit card traffic and see what kind of terminal will best fit your store front.

I recommend: Find POS terminals like the VeriFone Vx 570 and the Hypercom T7P at Electronic Clearing House, a company offering a wide range of equipment and solutions. More similar models are available at credit card processing companies like Infinity Financial Processing where retail business clients can browse models to find what they are looking for.

Look for credit card processing hardware accessories to handle debit/credit capability

With so many retailers offering customers advanced choices for handling their transactions, you'll want pin pads and small customer interface hardware. Check out what online firms can ship you to get these options into your customer's hands.

I recommend: Get Verifone and other point of sale pin pads from ID Systems for easy swiping in your store. You can find a whole bunch of other pin pad hardware like the TRANSACTION TEAM 1500LCD Signature Capture Terminal at POS Retail Solutions.

Locate portable POS equipment for credit card processing versatility

Sometimes you want the wait staff to be able to bring the credit card processing hardware to tables: or maybe you're looking to set up a roving mercantile system. For either of these kinds of innovations, online vendors can set you up with mobile hardware for wireless transactions.

I recommend: The Verifone VX 670 represents one popular solution for bringing the POS hardware to the customer for restaurant credit card processing solutions: get it and more at POSGlobal.com For more than just the standard restaurant style scanners, see what All Things POS has to offer in different models for portable credit card processing services related to all major merchant card companies.

Guide to Credit Card Processing Contracts

Understand and negotiate fees and terms set by banks and credit card processing companies.

By Greg Brown

Action Steps
The best contacts and resources to help you get it done

Who's who in credit card processing companies

It can be tricky at first, but a credit card transaction has basically four stops along the way. The customer's card is from a bank. It is issued and backed (think customer service)by a card company, like Visa or MasterCard. There's an often a third party clearing the deal (although it might be the customer's bank), and then your bank has to get the money.

I recommend: Forbes has a great, detailed analysis of credit card processing basics. See the gamut of merchant card services at Business.com.

Set up costs for credit card processing companies

The upfront costs of credit card processing -- equipment to accept credit cards, set-up fees, putting money into a kind of escrow called a reserve account -- all this is sunk cost, anywhere from $500 to triple that.

I recommend: Many vendors will eat set-up fees and even discount credit card processing equipment to get a sale, but watch out. They have to make money somewhere, right? If you want to accept credit cards, better to get into the basic terminology at the MerchantSeek glossary on credit card processing or try their exhaustive frequently asked questions page.

Accept credit cards, but price the volume right

A credit card merchant account is vital to many small businesses, but get the right mix of fees. Some contracts favor businesses that processes thousands of small transactions, like fast-food vendors. Others will be better for lower volume, high priced goods, like an antique shop.

I recommend: Bottom line: If your per transaction rate is high -- 5% is punitive, 2% is about right -- make sure fees are low or zero. If you agree to a low transaction rate, fees you might not even notice for meaningless things (statement fees, instance) could be piled on. Allbusiness.com has a good checklist for this. Merchant card services company VantageCard has detailed explanations. Also, run the actual fees you are quoted through the handy calculator at the Merchant Account blog.

Beware fine print in credit card merchant account contracts

Would you agree to eat lunch at the same coffee shop for three years? Buy toilet paper at the same store? Of course not. But if you're not careful, that can happen when you sign on with credit card processing companies.

I recommend: Read up on all the fine print tips at Business Know-How and at Web Marketing Today. See the Business.com directory page, too, for more on setting up a credit card merchant account.

Speed up the money using online credit card processing companies

Using a point-of-sale device, the card swiper we've all seen, is not instantaneous. In most cases, a cumbersome clearinghouse process means your money is days away, and the card might come back bad.

I recommend: Online credit card processing uses the Web to accept credit cards and charge while your customer is still there. (Wireless mobile credit card processing is similar.) This kind of credit card merchant account is particularly useful for automated sales on Web sites or, in the case of mobile credit card processing, for collecting on sales or service calls. Network Solutions, Verisign and Thawte have detailed solutions. There's more on online credit card processing and mobile credit card processing at Business.com.

Helpful advice for making the most of this Guide

• •  Terminology matters: 'Qualifed' charges means your employee at some point had the card in her hand and swiped it. 'Non-qualifed' charges are taken over the phone. Card processors usually try to charge a lot more for non-qualified charges.
• •  If you can handle the (slight) delay of not swiping, drive down costs by using online credit card processing. Open a screen, type in the numbers and it's payday.
• •  Chargebacks -- when customers turn back a charge because of some dispute -- can be expensive. If you deal with a lot of returns, make sure your choices in credit card processing companies won't penalize you for this.

Action Steps
The best contacts and resources to help you get it done

Find free start up merchant processing services

Business owners aren't made of money, any more than their customers are, and for many of them, getting into a credit card processing system is a costly task that can impact them as much as any other aspect of their business, especially where a lot of business is done online. No fee credit card processing helps out. Business operators can go with these kinds of merchant account options to maximize their profits without breaking the bank.

I recommend: No startup fee accounts are easy at FreeCreditCardProcessing.com, a premier credit card processing handling service waiving application costs for customers. Get more free setup options at Charge.com.

Find per-transaction credit card processing setups

A lot of companies offering credit card processing setups work on a commission basis - they make money when a customer does, by taking a percentage of each sale in exchange for comprehensive credit card processing solutions.

I recommend: Look at the easy percentage-based credit card transaction processing and handling agreements from Intelli-Collect, a company putting payment solutions in clients' hands. Talk to FAST TRANSACT to see how their commission-based merchant accounts can offer credit card processing with per transaction fees.

Look for credit card processing providers without hidden fees

Other companies strive to provide these services without hiding a lot of extra charges in the small print. Buyers who have been burned by a lot of small hidden fees gravitate toward offers that are more straightforward.

I recommend: For relief from charges like leasing fees or warranty club charges, check out Total Merchant Services, where you can get video talk from management. Get a range of other options from USMSmerchant.com, where the company promises no hidden fees and pledges to work transparently with customers.

Helpful advice for making the most of this Guide

• •  Always match your solutions to your needs for credit card processing service. Look at the scope of your business and find out which kind of offer best applies.

Action Steps
The best contacts and resources to help you get it done

Merchant account

A merchant account is an account that a business must open in order to start accepting credit cards as payments. The merchant account serves as a type of escrow to process the transactions and release the money after a specific period of time.

I recommend: Merchant Seek offers an introduction to merchant accounts, how these accounts work and what other tools are necessary for successful transactions.

Transaction charges

A transaction charge is a small fee charged to the business that accepts a credit card payment. Many businesses offset these fees by charging convenience fees or adding the fee to the price of the product.

I recommend: Pay Simple provides information on some of the most common transaction charges related to credit card payments.

Mobile credit card processing, wireless credit card processing

Mobile or wireless credit card processing is a way for businesses to accept credit card payments from anywhere. This is a great solution for businesses with no specific point of sale or those that sell items from a variety of different locations.

I recommend: Merchant Warehouse offers a simple explanation of how wireless credit card processing works.

Batch

A batch is the total amount of credit card transactions accepted throughout the day and saved together until after the business day is over, then sent all at once to processing.

I recommend: Bank of America offers a step-by-step guide on how a credit card transaction is processed using a batching system.

Card verification code

A card verification code is the number printed on the back of credit cards that is unique to the specific line of credit. Businesses that request this information reduce the number of chargebacks and incidents of credit card fraud.

I recommend: CE Solutions gives an overview of the verification code and where to find these numbers on credit cards issued by the major credit card companies.

Holdback, reserve

A holdback or reserve is a fee held back from a credit card transaction through a company's merchant account. This fee is held in case there are chargebacks or disputed charges. The holdback is eventually released to the merchant.

I recommend: The Federal Deposit Insurance Corporation (FDIC) offers a Credit Card Activities Manual that explains the transaction process, risks taken on all parties and management of merchant processing.