Pen Freak

Accept credit cards

Many people today simply prefer the convenience of paying by credit card. If you want their business, you must be able to accept their credit-card payments.

As many businesses have found, up to 70 percent of people never mail the check, so accepting credit cards is crucial. Obtaining merchant status, which allows you to accept credit-card payments, might seem like an unnecessary hassle, especially for those in business where the majority of their customers pay by cash or check. Look at the majority of business today, all of them accept credit cards, and becoming more and more popular all the time are debit cards.

When you apply for merchant status, the banks evaluate your business based on its sales track record, the type of business it is, your credit record, the business’s credit record and your overall financial picture.

In order to accept credit cards, you need to work with a bank that will transfer the money into your account within a day or two of the sale, and then collect the money from the customer. In return, you pay the bank a commission of 1.5 percent to 5 percent for each credit-card transaction; a set, per-transaction fee; and a setup fee.

If someone writes a bad check, for instance, it will cost you time and money to recover the loss. If you swipe a customer’s credit card through a point-of-sale terminal, you can be sure you’ll get paid. The machine contacts the issuing bank to authorize the transaction and runs the account numbers through a variety of fraud-protection procedures.