Get Credit Processing Prices 1. Is your business located in the United States or Canada? Choose... United States Canada 2. Does your business currently accept credit cards?   Choose... Yes No

• Compare Credit Card Processing Firms • Read our Purchasing Advice • View Listings of Leading Suppliers

Credit Card Purchasing Overview

To accept credit card payments, you have to set up a merchant account. It's not a complicated process, but there are hundreds of companies competing for your business, so choosing the right one can be difficult.

Merchant account providers charge a "discount rate" — a percentage of each transaction they handle — as well as a per-transaction fee. They may also charge application fees, monthly minimums, and many other types of fees. Be sure to compare the total monthly costs for each supplier you're evaluating.

Additionally, the more risk providers see in your business, the more you'll be charged for merchant credit card processing. Product sales are considered safer than services; mail order and phone transactions are riskier than in-person sales.

Applying for merchant account credit card privileges may seem like a hassle, but it's essential for doing online business. Most e-commerce web sites require customers to make an online payment for their purchase. These online credit card transactions ensure you get payment right away. It also allows you to better serve your customers by shipping items without waiting for payments by mail or checks to clear.

However, you don't need a merchant account to accept Internet payments through your web site. Certain web sites, like eBay's PayPal service, accept an electronic payment on your behalf, process it, and take a percentage of the payment before sending the balance to your account. This is usually a solution for small businesses or personal transactions, but it can bridge the gap while you wait for credit card processors to grant you an account.

Other Credit Card Processing terminology:

As you shop for credit card processing services, you may come across several different words and phrases that may not seem familiar. Among these terms:

• Credit card processing: (also called "card services", "merchant services", "merchant accounts", "credit card services", "payment processing")
• Online payments: Making credit card purchases over the Internet or through a third-party service.
• Payment gateway: The online system for processing customers' credit cards at the time of purchase.
• Processing credit card: When businesses with a merchant account accept credit cards for goods and services

Points to consider:

• How do you collect credit card information currently: in-person, over the internet, over the phone, or through the mail?
• What types of credit cards do you wish to accept?
• Do you need to process debit card information as well?
• Do you need credit card terminals?
• Do you need additional services such as check processing?
• How much is your average credit card transaction?
• What is your monthly credit card processing volume?

Leading suppliers:

• 1st American Card Service
• 1st National Merchant Services
• Cardaccept
• Citibank
• Federated Payment Systems
• Merchant Express
• North American Bancard
• Paynet Systems
• Verus

Related articles - February 2012