Merchant Accounts: What are your options?

Accepting Credit Cards in Your Business

The attached information sheets are provided to give you a general understanding of the fundamentals of the credit card industry. The information may not answer all your questions, but may help you determine whether or not to accept credit cards in your business.

Although every business has some basic requirements in accepting credit cards, each business has its own special requirements. Discuss your particular needs with an agent to develop a plan that will fit your business requirements. If the agent wants to tell you all about his products before he/she has discussed your business and your requirements, you may be talking to the wrong agent.

The agent should suggest a number of benefits and services, such as:
· A state-of-the-art, counter-top or wireless credit card terminal
· An NSF check collection service, if you plan on accepting checks
· A Check Guaranty Program that guarantees payment of any "bad" check
· Software to process credit cards through your computer and over the Internet
· Website credit card processing with a shopping cart
· Other methods to process credit cards

About Your Customer

Purchasing Payment Preferences

Understanding the payment habits of most Americans can help you decide on the payment options you want to offer your customers. Before the 1800's, everything was paid for with cash. In the 1940's, checks became the favorite method of payment. Today, credit cards are taking the lead as illustrated below:

There are several reasons for this trend:
· It allows the impulse buyer to "buy now, pay later."
· The customer has a lack of cash in the bank to write a check.
· Credit card companies are offering bonuses for using their credit cards (air miles, cruises, etc.).
· Customers who could pay in cash or by check, choose to pay by credit card for the bonuses.

About Your Customer

Purchasing Payment Preferences

Understanding the payment habits of most Americans can help you decide on the payment options you want to offer your customers. Before the 1800's, everything was paid for with cash. In the 1940's, checks became the favorite method of payment. Today, credit cards are taking the lead.

There are several reasons for this trend:

· It allows the impulse buyer to "buy now, pay later."
· The customer has a lack of cash in the bank to write a check.
· Credit card companies are offering bonuses for using their credit cards (air miles, cruises, etc.).
· Customers who could pay in cash or by check, choose to pay by credit card for the bonuses.

Price Point Payment Preferences

Depending on the type of business you are running, the customer will have a different preference of payment. If you are selling items in price from $1.00 to $20.00, your customer's payment preference will probably be in the form of cash. If the items sell around $100.00, the preference will probably be in the form of credit cards. See the illustration below:

Items Sales Price / Payment Method
$1.00 - $20.00 / Cash
$20.00 - $55.00 / Pin Debt Card
$55.00 - $75.00 / Checks
$75.00 - $100.00 / Credit Card

Increase Sales with Checks and Credit Cards

The benefits of taking these forms of payments are simple. The more payment options you offer, the easier it is for the customer to purchase your product or service.

If you only accept cash, you could be reducing your sales opportunity by as much as 40% depending on the type of products or services you sell. By adding checks to your payment options, you may increase your sales by about 15%. By adding both checks and credit cards, you may increase your sales by as much as a combined rate of 60%.

If you decide to accept credit cards and cash only as a means of payment, you will increase your sales by 30% over accepting only cash according to research done by the VISA/Master Card processors