You run a small business and are ready to take the next step: accepting credit cards. Congratulations! Whether this is your first business or a new venture you’re investing in, you might not be too familiar with credit card processing.
Outlined below are four steps to set up credit card processing for a small business. We threw in our industry expertise for each action item.
Small businesses tend to have simple business models and low processing volume, so an uncomplicated pricing plan is best. Our recommendation is either Flat or Interchange-plus pricing for small businesses as each offers unique benefits.
From a cost-savings perspective, Interchange-plus is the winner, but that pricing plan requires your business to be set up with a proper merchant account (more on that later). Gaining an understanding of how fees are calculated is helpful as you take these steps; a good starting point is learning about credit card processing basis points.
It’s likely your small business doesn’t need all the bells and whistles to process credit cards, but it’d be silly to pass up on tools that fight fraud, keep your customers’ data safe and give your business a competitive advantage. There are plenty of tools to consider for your small business credit card processing. We believe the following are must-have features for small businesses:
Now that you’ve evaluated pricing plans and features, it’s time to consider the not-so-fun stuff: contracts. You’ll have two options for a credit card processing contract: month-to-month or long term.
Long-term contracts can include sneaky terms that lock you into an extended agreement or pose a hefty fee if you want to exit the terms before the end date. You should also be wary of miscellaneous fees, some of which are completely unethical, that can have a significant impact on a small business with low processing volume.
An easy starting point is to ensure you avoid a monthly fee for your small business credit card processing.
Depending on what you find out during steps one through three, the process to sign up for credit card processing can go one of two ways: instant set up or an application process.
If your heart is set on Flat pricing, you’re looking at instant set up with a Payment Facilitator. Processing can start as soon as you fill out your information, but you’ll likely receive limited support from the facilitator and sometimes deal with held funds.
With an Interchange-plus pricing plan, you must work with a true Merchant Service Provider and go through an application process, which includes an underwriting period before approval. This process usually takes two to five days to complete, but you benefit from quality support and uninterrupted access to your funds.
As you read through each step, what were your preferences for your small business credit card processing? Tell us in the comments below!