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What
Is Involved to be able to Accept Credit
Cards in your Business?
by
Bruce Keiffer
President, National
Card Systems, Inc
Without being too detailed in this short article, the
first thing you'll need to reveal is:
-
What
Are You Selling?
The reason for this is because Visa and MasterCard
does not accept every type of business there is.
Because of high return and charge back risks, each
sponsored bank has a criteria of what kinds of
business they will and will not accept. That is
why when you check with your local bank there is a
very good chance that your application will be
denied if you are anything but retail.
.
-
What
Is The Criteria For Acceptance?
The less risk your business is to the bank, the
greater your chance of acceptance. If you were
operating a retail store selling stationary, your
chances for approval is many times greater than if
you were operating the same business from your
home or over the Internet. To the bank the retail
store is far more secure than your home based
business.
.
-
What
Do I Do Then To Accept Cards?
I Am Not A Retail Store
The answer is that you need to work with a company
or a bank that can approve these kinds of
businesses. They have met the criteria and the
requirements from Visa/MasterCard to approve
businesses other than your standard walk in Retail
store such as Mail Order, Phone Order, and
Internet related businesses.
.
-
What
About The Costs? Are They Any Different For A
Retail Vs. Home Based Business
The answer to this goes back to the "Greater
The Risk, The Higher The Cost." In almost
every case the cost (discount rate) to process a
transaction is going to be more to you than if it
was done in person. Most home based businesses
process sales over the phone, through the mail,
and over the Internet. There is no signed sales
receipt in all of these types of transactions.
This invites the high possibility of charge-backs.
Hence, more risk, higher cost than if it was
retail.
.
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What
Kinds Of Typical Startup Costs
Can I Expect?
You should expect to invest a startup amount of
between $190.00 - $300.00 from most companies in
our industry. These amounts can include
application, setup, equipment rental lease
deposits as well as additional costs for poor
credit, higher risk, etc.
.
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What
About Equipment? What Will It Cost?
This is going to vary depending on the kind of
equipment you choose. If you lease your equipment,
your payments should range anywhere from $35.00 to
$49.00 per month for a complete processing system
including a terminal and an automatic printer, and
in many cases software. If you are looking to
process Online Internet real-time transactions,
and want to add on Shopping Carts, etc, amounts
will increase according to the amount of
customization you need.
.
-
Is
It Really Necessary To Accept
Credit Cards to Be Successful?
Yes, it is. Here are just a few reasons why:
The average cash sale amount is $9.00. The average
credit card sale is $40.00. That is a 450%
increase per transaction. Is it any wonder why you
do not see VISA/MASTERCARD signs disappearing from
store windows? This is no different in a home
based, and more importantly an Online business.
Another factor is this: Without giving your
customers the convenience of accepting payment via
credit cards, your sales are going to be far less
than your competitors that do accept credit cards.
This is a basic fact of business.
The bottom line?... If you're going to
be in business, it's vital to the success of your
business to offer your customers the convenience of
paying by credit cards.
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