Accepting Credit-Card Payments

The first question to ask is, "Will accepting credit cards produce enough additional sales to at least cover the cost of processing credit-card transactions?" Fixed and variable fees make it possible to lose money by accepting this form of payment.

Traditionally credit cards have been processed using a merchant account. Application requirements can be extensive and qualifying for the lowest rate is tough nearly impossible. Many businesses get approved but end up paying more than the advertised rate because they aren't deemed to be 'good risks' (even with a good credit rating).

Merchant accounts may be the most expensive route. Fees vary and are only limited by issuers' imaginations, like application fees in the $100's and $50 per chargeback. There's monthly fees ($20 for processing, $15 for statements) and issuers often keep part of each sale to build a reserve. Long-term contracts are usually required and early-termination fees apply.

The up side is convenience. Buyers like credit cards because they can avoid carrying cash and they don't have to wait for and worry about correct change. It also serves as a method of financing purchases. Swiping the credit card auto-starts the transaction. If approved, copies of the transaction are printed and ready for the customer's signature.

Finding a Merchant Account

Merchant accounts are available from some banks and from online issuers. The application process can take weeks (if the bank keeps asking for additional requirements) and odds are you will be quoted a rate higher than the advertised rate.

A popular merchant account service, believe it or not, is Sam's Club and First Data Corporation. They have live chat, a toll-free number, card swipers/pin pads and other store owners report that it's easier to apply, get accepted and qualify for low rates.

Some things to know:

• Ask for a disclosure of all fees and read 'Terms of Use' closely.
• Don't lease equipment - better to purchase with your credit card if you need installment payments.
• Merchant Banks can single you out, increase your fees and your 'reserve' at any time.
• The lowest rates often require multi-year contract commitments.

A Costly Option

Perhaps the most expensive option is consignment software 'integrated' with card processing - expensive for 4 reasons:

1. The consignment software itself costs a lot more than software without integration.
2. Total credit-card fees may be higher.
3. You get locked in. You pay $x,xxx for consignment software 'integrated' with credit-card processing and you're unlikely to dump expensive consignment software to change credit-card services.
4. The consignment software vendor gets an (undisclosed) percentage of each of your credit-card sales for pushing X-Charge. Yes, that should be disclosed. No, it's not.

More About PayPal

PayPal simplifies matters with online access to transactions and statements.

• No software integration with your PC required
• No hardware to buy
• No software to install
• No merchant account or credit-card processor
  • No annual commitment or fees
  • No startup or cancellation fees
  • No lengthy credit application
  • No gimmicks like bait/switch fees, broken agreements
  • One source for records, easy reports and administration
• Owned by reputable eBay - You are less likely to be mistreated.
• Create unique log-ins for your employees
• Email receipts and professional-looking invoices to customers
• Excellent fraud protection
• Generate custom packing slips
• Optionally accept phone, fax, mail payments (monthly fee)
• Process transactions for customers without PayPal accounts
• Processing fees (2.9% to 3.1% + $0.30 per transaction)
• Ship to non-billing address
• Shipping and tax provisions
• Visa, American Express, MasterCard and Discover
• Website processing fees (1.9 to 2.9% + $0.30 per transaction)

Wireless Credit Card Processing

With PayPal it is now possible to accept credit cards remotely from anywhere with a hand-held terminal.

As a matter of disclosure, BCSS will receive a small one-time referral fee by PayPal should you chose to process credit-card transactions through them, but only if you access the PayPal site through the link we provide.

BCSS and Credit-Card Processing

BCSS is not tied to one credit-card processor and we don't get kickbacks from your sales. This allows you to find the best merchant account (perhaps from your local bank) and use it in conjunction with our software. Just swipe the card and select the card type from a drop-down menu in BCSS. The amount of the sale is auto-entered.