HOW TO SECURE A MERCHANT ACCOUNT TO
ACCEPT VISA & MASTERCARD
You can seriously increase your orders by accepting credit cards as
payment. It's easy and convenient for the customer, and that makes it
more likely for them to order. The only problem is that it's hard for a
business, especially a small mail order business, to gain the ability to
accept credit cards.
Banks are very reluctant to authorize credit card acceptance, mainly
because they have been burned too many times by fraudulent
businesses. So, many businesses go on, accepting only checks or
money orders for payment, and miss out on the added sales they
would get through credit cards. There is a way, though, for
businesses that can't get bank authorization to accept credit cards.
The easiest way to get a merchant account is to work with an
Independent Sales Organization (ISO), which acts as a middleman
between small businesses and banks. They will charge an additional
fee for each transaction, so you will be paying a bit more than the
standard percentage charged for credit card transactions. There will
also be an application fee. Here are the typical charges to expect, as
of this writing.
Application fees: Usually, these range from $95 to $400 and may or
may not be refundable.
Point of sale terminal purchase or lease: The terminal you
use to process the charge and check for fraudulent numbers is usually
available from a bank for around $300. You will only be able to get
this price, though, if a bank authorizes you. If working through an ISO,
prices will range from $400 to even as high as $1500! You can
usually lease the terminal, though, at an average of $45/month. The
best thing to do, though, is to find an ISO that will provide computer
software that can be used in place of a terminal. This will usually cost
only around $150.
Concerning service fees: Banks charge between 2% and 5% for
processing a credit card purchase. ISO's charge higher, usually 3%
to 7%. They also usually charge a per transaction fee of 20 to 25
cents, and a monthly statement fee of $5 to $10.
Why all these fees? ISO's only want to work with legitimate
businesses and ones that will stay with them for a long period of time.
If a business can afford these fees, they are considered less of a risk.
Thus, the important thing to do is to shop around for an ISO. Get as
much information as you can about each ISO you are considering, and
READ it thoroughly. Look for hidden charges and unreasonable
requirements.
Here is a list of some of the ISO's you may want to consider. This is
not an endorsement of any or all of them, these are just the most
prominent ones.
Bancard, Inc., 1233 Sherman Drive, Longmont, CO 80501 (800)
666-7575
Data Capture Systems, 231 Quincy St., Rapid City SD 57701 (605)
341-6461
Electronic Bankcard Systems, 2554 Lincoln Blvd., Suite 1088, Marina
Del Rey, CA 90291 (213) 827-5772
Gold Coast Bankcard Center, Ft. Lauderdale, FL (305) 492-0303
Harbridge Merchant Services, 681 Andersen Dr., 4th Flr., Bldg. 6,
Pittsburgh, PA 15220 (412) 937-1272
Teleflora Creditline, 12233 West Olympic Blvd., Los Angeles, CA
90064 (800) 325-4849
US Merchant Services, 775 Park Avenue, Huntington, NY 11743
(516) 427-9700
A final word: All of these services will require you to fill out an
application. Be 100% truthful with everything on the application and
don't let the representative talk you into putting anything false down.
The reason is, if the banks affiliated with the ISO you use were to find
out that any information on your application is false, you would
probably be immediately cancelled and your business name and
address would go on a "black list."
This would prevent you from being able to accept credit cards
for an indefinite period of time. Don't let this happen to you. Most of
the ISO's out there are legitimate, but there are a few that may put
down spurious information, rather than lose the fees they'd receive.
Be sure to look everything over twice. If you do, you'll probably find an
ISO that will work with you to expand your business through the
acceptance of credit cards.
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