Accepting Credit Cards

In these business times accepting credit cards and debit cards is a necessary evil that most businesses must do. It's a convenience but also another expense that eats into your profit. An established business (using our company's figures as of today) will pay the merchant service provider about:

  2.2% for consumer MC/Visa charges
  4.1% for business card MC/Visa charges
  3.2% for any American Express charges
  2.5-3 % for Discover card charges

These rates can change periodically and usually not in your favor. You should ask your merchant services provider rep when this can happen and how to negotiate lower rates again. They may have a small notice on your statement that you ignore and "WOW" the next month your charges are 50% higher. If you have few if any chargebacks and regular charges, you should be getting the best rates to encourage you to stay with that service provider.

Beware of people calling you on the phone and offering low rates because they have other built-in charges and fees buried in the contract. I like to start at the bank where our checking account is and see if their rates are competitive. When setting up a new merchant service you don't have to but the credit card machine or software from that provider, it will be lower cost from other companies you can find on the internet. Watch your costs and fees because they come right out of your profit and botton line.

Barry is an international business author and speaker who may be available for your next meeting or event. www.idealetter.com