Credit,Cards,Merchant,Accounts business, insurance Credit Cards, Merchant Accounts, and Your Bottomline

As we all know to live in this world we have to perform some activity by which we can earn money. There are many activities by which we can earn money and meet the standards to live in this society. And from one of them is franchise.  Franc Small offices have unique needs, and thatincludes document shredding. Designed with the smaller business inmind, the Dahle 20314 is a cross-cut shredder that offers Level 3security and brings you into compliance with federal regulations. The

Small Business Q&A with Tim KnoxQ: I'm opening a gift shop and want to be able to accept creditcards. I talked to the branch manager at my bank, but he didn'tseem to know much about how it all worked. He did say that Iwould need something called "a merchant account" and somethingelse called "a credit card processor." Beyond that he seemedas clueless as I am. I'm thinking about going to another bank.Can you explain how that all works? -- Mary Ann G.A: Mary Ann, I'm going to give your banker the benefit of thedoubt and say that a lack of knowledge regarding the specificsof credit card processing is not necessarily a reflection ofthe banker's competence. I have found over the years thatmost bankers, no matter how experienced or knowledgeable aboutthe banking business they my be, don't really know much abouthow credit card processing and acceptance really works. That'sbecause the task of accepting and verifying credit card purchases is handled by third party service companies who process and deposit (or settle) the funds into a bank merchantaccount.The decision to accept credit cards is a wise one for anyretailer. I agree with financial guru Dave Ramsey's teachingsregarding the use and abuse of credit cards. Many people digdeep holes with credit cards that are hard to climb out of. But, from a practical business point of view, any retail business that does not accept credit cards is leaving money on the table. Research has shown that accepting credit cards increases revenue and helps with cash flow since you receive the money within a couple of days instead of waiting up to a week for a check to clear. Credit cards don't bounce, as some checks have a tendency to do.Credit card users are also more likely to buy on impulse andspend more when they do. Bad news for them, but good news foryou. If you have a social conscience concerning the use of consumer credit cards, a retail operation probably isn't the business for you. To accept credit cards at a brick and mortar location you typically need four things. The requirements may vary a little,but the following applies in most cases. You will need: (1) A way to enter the customer's credit cardinformation into a verification and processing system. Thiscan be done with a swipe terminal, point of sale system, or bycalling the credit card in by phone; (2) A credit card gatewaycompany to verify the credit card's validity and process thepayments; (3) A credit card merchant account in which the gateway company will deposit payments made to you; and (4) A business bank account into which the settled funds will ultimately be deposited for your use.Here's how the process works. (1) You make a sale and the customer pays by credit card. (2) Using a card swipe machine or telephone, you contact what is known as a "gateway company" who takes the card information you submit and verifies that the card is valid and the charge can be made against the card account. The gateway company returns an approval code for the purchase. With a swipe machine or point of sale terminal the verificationprocess happens in a matter of seconds. If you're doing telephone verification it can take a couple of minutes. You call the gateway company, give them the credit card number andexpiration date and they give you an approval code that you write on the credit card charge slip. Either way, the money is typically deposited in your merchant account within 24 to 48 hours (less fees, of course).You'll also need to apply for merchant status with each creditcard company whose card you want to accept. To do business with American Express and Discover all you have to do is fill out an application, but to accept Visa and MasterCard you must have a merchant account. A merchant account is a special bank account set up for the expressed purpose of accepting credit card payments processed by the gateway company. Merchant accounts are usually associated with banks, though you can also use credit card merchant account service companies to perform the same function if you can not get approved for a bank merchant account.Applying for a merchant account at a bank is much the same asapplying for a loan. The only difference is sometimes a loanis easier to get. There is the prerequisite paperwork to complete and pledging of the first born, followed by an approvalprocess that can take up to several weeks. And you are not guaranteed that the bank will approve your merchant account, even if you have been a favored customer for many years. Banks have strict regulations regarding the granting of merchantaccounts and if issuing you a merchant account in anyway puts the bank at risk of losing money, you will be turned down. Banks always make decisions based on economics, not relationships (no matter what your banker tells you). Requirements for qualifying for a merchant account varies amongbanks, but in general the bank will look at the followingcriteria:How long have you been in business? Business longevitysuggests a history of stability, efficient management, and good financial health.What is your product or service? Does your product lend itself to a high rate of returns and chargebacks? A chargeback is a disputed credit card charge that is refunded to the buyer and charged against your account. You are accessed a chargeback fee that can be as much as $20 per event. If your business lends itself to high chargebacks, you will not get the merchant account.How's your credit report? Banks always look at how much you owe and how you pay your bills, so it's important to have good financial and trade references. If you have a history of late payments or defaults to vendors, it will count against you.What is your anticipated volume of sales and average transaction amount? The more money you make, the more money the bank makes.If you anticipate just a few credit card charges per week it may not be enough to justify the merchant account in the bank'seyes.Is your business categorized as a "high risk merchant?" High risk merchants are those with the highest instances of credit card fraud and chargebacks. High risk merchants include many types of internet-based businesses, telemarketers, travel and cruise businesses, and membership clubs. Being a high riskmerchant dramatically decreases your chances of getting a merchant account with a bank. Being a high risk merchant doesn't mean that you can't get a merchant account from somewhere else. Thanks to the growth of ecommerce in recent years there are a number of alternative companies that will provide you with a merchant account, sometimes with more perks than a traditional account, but almost always with higher fees.Also, not all banks support internet merchant accounts. If yours does not, shop around for one that does. We'll take a look at accepting credit cards online in next week's column.Here's to your success.Tim [email protected] For information on starting your own online or eBay business,visit http://www.dropshipwholesale.net Article Tags: Accept Credit Cards, Credit Cards, Merchant Accounts, Merchant Account, Credit Card, Accept Credit, Accepting Credit, Gateway Company, High Risk